UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to § 240.14a-12

MDU Resources Group, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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~~1200 West Century Avenue~~	~~David L. Goodin~~
	~~President and~~
	~~Chief Executive Officer~~
~~Mailing Address:~~
~~P.O. Box 5650~~
~~Bismarck, ND 58506-5650~~
~~(701) 530-1000~~

	~~March 13, 2013~~	1200 W. Century Ave. Bismarck, ND 58503 Mailing Address: P.O. Box 5650 Bismarck, ND 58506-5650 (701) 530-1000 www.MDU.com

David L. Goodin President and Chief Executive Officer


	~~To Our Stockholders:~~March 12, 2014

	To Our Stockholders:

	Please join us for the ~~2013~~2014 Annual Meeting of Stockholders. The meeting will be held on Tuesday, April ~~23, 2013,~~22, 2014, at 11:00 a.m., Central Daylight Saving Time, at 909 Airport Road, Bismarck, North Dakota.

	The formal matters are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. We also will have a brief report on current matters of interest. Lunch will be served following the meeting.

	We were pleased with the stockholder response for the ~~2012~~2013 Annual Meeting at which ~~89.72~~89.07 percent of the common stock was represented in person or by proxy. We hope for an even greater representation at the ~~2013~~2014 meeting.

	You may vote your shares by telephone, by the Internet, or by returning the enclosed proxy card. Representation of your shares at the meeting is very important. We urge you to submit your proxy promptly.

	Brokers may not vote your shares on two of the three matters to be presented if you have not given your broker specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote can be counted.

	All stockholders who find it convenient to do so are cordially invited and urged to attend the meeting in person. Registered stockholders will receive a request for admission ticket(s) with their proxy card that can be completed and returned to us postage-free. Stockholders whose shares are held in the name of a bank or broker will not receive a request for admission ticket(s). They should, instead, (1) call (701) 530-1000 to request an admission ticket(s), (2) bring a statement from their bank or broker showing proof of stock ownership as of February 25, ~~2013,~~2014, to the annual meeting, and (3) present their admission ticket(s) and photo identification, such as a driver’s license. Directions to the meeting will be included with your admission ticket.

	I hope you will find it possible to attend the meeting.


		Sincerely yours,


		David L. Goodin


MDU Resources Group, Inc.Proxy Statement

Proxy Statement

MDU ~~Resources Group, Inc.~~RESOURCES GROUP, INC.

1200 West Century Avenue

Mailing Address:
P.O. Box 5650

Bismarck, North Dakota 58506-5650
(701) 530-1000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 22, 2014

Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to Be Held on April 22, 2014

The 2014 Notice of Annual Meeting and Proxy Statement and 2013 Annual
Report to Stockholders are available at www.mdu.com/proxystatement.

~~Mailing Address:~~
~~P.O. Box 5650~~
March 12, 2014

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MDU Resources Group, Inc. will be held at 909 Airport Road, Bismarck, North Dakota, ~~58506-5650~~
~~(701) 530-1000~~

~~NOTICE OF ANNUAL MEETING OF STOCKHOLDERS~~
~~TO BE HELD APRIL 23, 2013~~

~~Important Notice Regarding~~on Tuesday, April 22, 2014, at 11:00 a.m., Central Daylight Saving Time, for the ~~Availability of Proxy Materials for the~~
~~Stockholder Meeting to Be Held on April 23, 2013~~

~~The 2013 Notice of Annual Meeting and Proxy Statement and 2012 Annual Report~~
~~to Stockholders are available at www.mdu.com/proxymaterials.~~following purposes:


	~~March 13, 2013~~(1)	Election of eleven directors nominated by the board of directors for one-year terms;

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MDU Resources Group, Inc. will be held at 909 Airport Road, Bismarck, North Dakota, on Tuesday, April 23, 2013, at 11:00 a.m., Central Daylight Saving Time, for the following purposes:

~~(1)~~	~~Election of ten directors nominated by the board of directors for one-year terms;~~

(2)	Ratification of the appointment of Deloitte & Touche LLP as the company’s independent ~~auditors~~registered public accounting firm for ~~2013;~~2014;

	(3)	Approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers; and

	(4)	Transaction of any other business that may properly come before the meeting or any adjournment(s) thereof.

~~The board of directors has set the close of business on February 25, 2013,~~

The board of directors has set the close of business on February 25, 2014, as the record date for the determination of common stockholders who will be entitled to notice of, and to vote at, the meeting and any adjournment(s) thereof.

All stockholders who find it convenient to do so are cordially invited and urged to attend the meeting in person. Registered stockholders will receive a request for admission ticket(s) with their proxy card that can be completed and returned to us postage-free. Stockholders whose shares are held in the name of a bank or broker will not receive a request for admission ticket(s). They should, instead, (1) call (701) 530-1000 to request an admission ticket(s), (2) bring a statement from their bank or broker showing proof of stock ownership as of February 25, ~~2013,~~2014, to the annual meeting, and (3) present their admission ~~ticket(s )~~ticket(s) and photo identification, such as a driver’s license. Directions to the meeting will be included with your admission ticket. We look forward to seeing you.


	By order of the Board of Directors,



	Paul K. Sandness
	Secretary


MDU Resources Group, Inc.Proxy Statement

Proxy Statement


				Page
~~Notice of Annual Meeting of Stockholders~~
Notice of Annual Meeting of Stockholders

Proxy Statement		1

	Voting Information		1

	Item 1. Election of Directors		3	2

		Director Nominees		3

Item 2. Ratification of Independent Registered Public Accounting Firm		10

	~~Item 2. Ratification of Independent Auditors~~			10

		Accounting and Auditing Matters		10	11

	Item 3. Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers		11	12

	Executive Compensation		12	13

		Compensation Discussion and Analysis		12	13

		Compensation Committee Report		29	30

Summary Compensation Table for 2013		31

		~~Summary Compensation Table for 2012~~Grants of Plan-Based Awards in 2013		30	32

Outstanding Equity Awards at Fiscal Year-End 2013		35

		~~Grants of Plan-Based Awards in 2012~~Pension Benefits for 2013		31	36

		~~Outstanding Equity Awards at Fiscal Year-End 2012~~Nonqualified Deferred Compensation for 2013		34	39

		~~Option Exercises and Stock Vested During 2012~~		35

		~~Pension Benefits for 2012~~		35

		~~Nonqualified Deferred Compensation for 2012~~		38

		Potential Payments upon Termination or Change of Control		39	40

		Director Compensation for ~~2012~~2013		46	45

	Information Concerning Executive Officers		49	48

	Security Ownership		50	49

	Related Person Transaction Disclosure		52	51

	Corporate Governance		52	51

	Section 16(a) Beneficial Ownership Reporting Compliance		58

	Conduct of Meeting; Adjournment		58

Other Business		58

	~~Other Business~~			59

	Shared Address Stockholders		59	58

	~~2014~~2015 Annual Meeting of Stockholders			59	58

Exhibit A – Companies that Participated in the Compensation Surveys used by ~~MDU Resources Group, Inc.’s Human Resources Department~~Towers Watson		A-1




Exhibit B – Companies Surveyed using Equilar, Inc. – for Named Executive Officer Positions – Competitive Analysis Measuring Base Salary, Target Annual Cash Compensation, and Target Total Direct Compensation				~~B-1~~

MDU Resources Group, Inc.Proxy Statement

Proxy Statement

PROXY STATEMENT

The board of directors of MDU Resources Group, Inc. is furnishing this proxy statement beginning March ~~13, 2013,~~12, 2014, to solicit your proxy for use at our annual meeting of stockholders on April ~~23, 2013,~~22, 2014, and any adjournment(s) thereof. We are soliciting proxies principally by mail, but directors, officers, and employees of MDU Resources Group, Inc. or its subsidiaries may solicit proxies personally, by telephone, or by electronic media, without compensation other than their regular compensation. Okapi Partners LLC additionally will solicit proxies for approximately ~~$7,000~~$7,500 plus out-of-pocket expenses. We will pay the cost of soliciting your proxy and reimburse brokers and others for forwarding proxy material to you.

The Securities and Exchange Commission’s e-proxy rules allow companies to post their proxy materials on the Internet and provide only a Notice of Internet Availability of Proxy Materials to stockholders as an alternative to mailing full sets of proxy materials except upon request. For ~~2013,~~2014, we have elected to use the Securities and Exchange Commission’s full set delivery option, which means that while we are posting our proxy materials online, we are also mailing a full set of our proxy materials to our stockholders. We believe that mailing a full set of proxy materials will help ensure that a majority of outstanding shares of our common stock are present in person or represented by proxy at our meeting. We also hope to help maximize stockholder participation. Therefore, even if you previously consented to receiving your proxy materials electronically, you will receive a full set of proxy materials in the mail for this year’s annual meeting. However, we will continue to evaluate the option of providing only a Notice of Internet Availability of Proxy Materials to some or all of our stockholders in the future.

VOTING INFORMATION

Who may vote?You may vote if you owned shares of our common stock at the close of business on February 25, ~~2013.~~2014. You may vote each share that you owned on that date on each matter presented at the meeting and any adjournment(s) thereof. As of February 25, ~~2013,~~2014, we had ~~188,830,529~~189,789,192 shares of common stock outstanding entitled to one vote per share.

What am I voting on?You are voting on:


•	election of ~~ten~~eleven directors nominated by the board of directors for one-year terms

•	ratification of the appointment of Deloitte & Touche LLP as the company’s independent ~~auditors~~registered public accounting firm for ~~2013~~2014

•	approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers and

•	any other business that is properly brought before the meeting or any adjournment(s) thereof.

What vote is required to pass an item of business?A majority of our outstanding shares of common stock entitled to vote must be present in person or represented by proxy to hold the meeting.

If you hold shares through an account with a bank or broker, the bank or broker may vote your shares on some matters even if you do not provide voting instructions. Brokerage firms have the authority under the New York Stock Exchange rules to vote shares on certain matters when their customers do not provide voting instructions. However, on other matters, when the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs.This means that brokers may not vote your shares on items 1 and 3 if you have not given your broker specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote can be counted.



MDU Resources Group, Inc. Proxy Statement	1

Proxy Statement

Item 1 – Election of Directors

A majority of votes cast is required to elect a director in an uncontested election. A majority of votes cast means the number of votes cast “for” a director’s election must exceed the number of votes cast “against” the director’s election. “Abstentions” and “broker non-votes” do not count as votes cast “for” or “against” the director’s election. In a contested election, which is an election in which the number of nominees for director exceeds the number of directors to be elected, directors will be elected by a plurality of the votes cast. If a nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not anticipate, the proxies will vote your shares in their discretion for another person nominated by the board.

Our policy on majority voting for directors contained in our corporate governance guidelines requires any proposed nominee for re-election as a director to tender to the board, prior to nomination, his or her irrevocable resignation from the board that will be effective, in an uncontested election of directors only, upon:


•	receipt of a greater number of votes “against” than votes “for” election at our annual meeting of stockholders and

•	acceptance of such resignation by the board of directors.

Following certification of the stockholder vote, the nominating and governance committee will promptly recommend to the board whether or not to accept the tendered resignation. The board will act on the nominating and governance committee’s recommendation no later than 90 days following the date of the annual meeting.

Item 2 – Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent ~~Auditors~~Registered Public Accounting Firm for ~~2013~~2014

Approval of Item 2 requires the affirmative vote of a majority of our common stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. Abstentions will count as votes “against” the proposal.

Item 3 – Approval, on a Non-Binding Advisory Basis, of the Compensation of the Company’s Named Executive Officers

Approval of Item 3 requires the affirmative vote of a majority of our common stock present in person or represented by proxy at the meeting and entitled to vote on the item. Abstentions will count as votes “against” the item. Broker non-votes are not counted as voting power present and, therefore, are not counted in the vote.

Unless you specify otherwise when you submit your proxy, the proxies will vote your shares of common stock “for” all directors nominated by the board of directors and “for” items 2 and 3.

How do I vote? There are three ways to vote by proxy:


•	by calling the toll free telephone number on the enclosed proxy card

•	by using the Internet as described on the enclosed proxy card or

•	by returning the enclosed proxy card in the envelope provided.

You may be able to vote by telephone or the Internet if your shares are held in the name of a bank or broker. Follow their instructions.

You may also vote in person at the meeting. However, if you are the beneficial owner of the shares, you must obtain a legal proxy from the holder of record of the shares, usually your bank or broker, and present it at the meeting. A legal proxy identifies you, states the number of shares you own, and gives you the right to vote those shares. Without a legal proxy we cannot identify you as the beneficial owner of the shares or know how many shares you have to vote.

Can I revoke my proxy? Yes.

If you are a stockholder of record, you can revoke your proxy by:


•	filing written revocation with the corporate secretary before the meeting

•	filing a proxy bearing a later date with the corporate secretary before the meeting or

•	revoking your proxy at the meeting and voting in person.




2	MDU Resources Group, Inc. Proxy Statement

Proxy Statement

ITEM 1. ELECTION OF DIRECTORS

The board expresses its thanks to Terry D. Hildestad, who retired on January 3, 2013. He had served as president and chief executive officer of the company and as a director since August 17, 2006. He had served as president and chief operating officer from May 1, 2005 until August 17, 2006. He began his career with the company in 1974 at Knife River Corporation, where he served in several operating positions before becoming its chief executive officer in 1993 through April 2005.

~~The board also expresses its thanks to Richard H. Lewis~~Thomas C. Knudson for his service on the board ~~the audit committee,~~ and the ~~nominating and governance~~compensation committee. Mr. ~~Lewis also served on the compensation committee during his tenure. Mr. Lewis~~Knudson is not standing for ~~reelection~~re-election as a director after serving on the board since ~~2005.~~2008.

All nominees for director are nominated to serve one-year terms until the annual meeting of stockholders in ~~2014~~2015 and until their respective successors are elected and qualified, or until their earlier resignation, removal from office, or death.

We have provided information below about our nominees, all of whom are incumbent directors, including their ages, years of service as directors, business experience, and service on other boards of directors, including any other directorships held during the past five years. We have also included information about each nominee’s specific experience, qualifications, attributes, or skills that led the board to conclude that he or she should serve as a director of MDU Resources Group, Inc. at the time we file our proxy statement, in light of our business and structure. Unless we specifically note below, no corporation or organization referred to below is a subsidiary or other affiliate of MDU Resources Group, Inc.

Director Nominees


		Thomas Everist	Director Since 1995
		Age 6364	Compensation Committee

		Mr. Everist has served as president and chairman of The Everist Company, Sioux Falls, South Dakota, an aggregate, concrete, and asphalt production company, since April 15, 2002. He has been a managing member of South Maryland Creek Ranch, LLC, a land development company, since June 2006, and president of SMCR, Inc., an investment company, since June 2006. He was previously president and chairman of L.G. Everist, Inc., Sioux Falls, South Dakota, an aggregate production company, from 1987 to April 15, 2002. He held a number of positions in the aggregate and construction industries prior to assuming his current position with The Everist Company. He is a director of Showplace Wood Products, Sioux Falls, South Dakota, a custom cabinets manufacturer, and has been a director of Raven Industries, Inc., Sioux Falls, South Dakota, a general manufacturer of electronics, flow controls, and engineered films since 1996, and its chairman of the board since April 1, 2009. Mr. Everist has served as a director and chairman of the board of Everist Genomics, Inc., Ann Arbor, Michigan, which provides solutions for personalized medicines since 2002. He served as Everist Genomics’ chief executive officer from August 2012 to December 2012. He was a director of Angiologix Inc., Mountain View, California, a medical diagnostic device company, from July 2010 through October 2011 when it was acquired by Everist Genomics, Inc. He has been a director of Bell, Inc., Sioux Falls, South Dakota, a manufacturer of folding cartons and packages, since April 2011.

		Mr. Everist attended Stanford University where he received a bachelor’s degree in mechanical engineering and a master’s degree in construction management. He is active in the Sioux Falls community and currently serves as a director on the Sanford Health Foundation, a non-profit charitable health services organization, and as a member of the Council of Advisors for Searching for Solutions Institute, a non-profit public foundation that provides leaders with resources to address critical social issues. From July 2001 to June 2006, he served on the South Dakota Investment Council, the state agency responsible for prudently investing state funds.

		The board concluded that Mr. Everist should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. A significant portion of MDU Resources Group, Inc.’s earnings is derived from its construction services and aggregate mining businesses. Mr. Everist has considerable business experience in this area, with more than 3940 years in the aggregate and construction materials industry. He has also demonstrated success in his business and leadership skills, serving as president and chairman of his companies for over 2526 years. We value other public company board service. Mr. Everist has experience serving as a director and now chairman of another public company, which enhances his contributions to our board. His leadership skills and experience with his own companies and on other boards enable him to be an effective board member and compensation committee chairman. Mr. Everist is our longest serving board member, providing 1819 years of board experience as well as extensive knowledge of our business.



MDU Resources Group, Inc.Proxy Statement	3

Proxy Statement


		Karen B. Fagg	Director Since 2005
		Age 5960	Nominating and Governance Committee
			Compensation Committee

		Ms. Fagg served as vice president of DOWL LLC, d/b/a DOWL HKM, an engineering and design firm, from April 2008 until her retirement on December 31, 2011. Ms. Fagg was president from April 1, 1995 through ~~March 2008,~~June 2000, and chairman, chief executive officer, and majority owner from June 2000 through March 2008 of HKM Engineering, Inc., Billings, Montana, an engineering and physical science services firm. HKM Engineering, Inc. merged with DOWL LLC on April 1, 2008. Ms. Fagg was employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and from 1993 to April 1995 she served as vice president of operations and corporate development director. From 1989 through 1992, Ms. Fagg served a four-year term as director of the Montana Department of Natural Resources and Conservation, Helena, Montana, the state agency charged with promoting stewardship of Montana’s water, soil, energy, and rangeland resources; regulating oil and gas exploration and production; and administering several grant and loan programs.

		Ms. Fagg has a bachelor’s degree in mathematics from Carroll College in Helena, Montana. In 2013, she served on a three-person selection committee appointed by the Attorney General to identify trustees for the Montana Healthcare Foundation Board. She also became a board member of the Montana Justice Foundation, whose mission is to achieve equal access to justice for all Montanans through effective funding and leadership, and of the First Interstate BancSystem Foundation, which has a strong commitment to community. She has been a board member of the Billings Chamber of Commerce since July 2009 and its board chair since July 2013, as well as a member of the Billings Catholic School Board since December 2011. She served on the board for St. Vincent’s Healthcare from October 2003 until October 2009, including a term as board chair, on the board of Deaconess Billings Clinic Health System from 1994 to 2002, as a member of the Board of Trustees of Carroll College from 2005 through 2010, and on the board of advisors of the Charles M. Bair Family Trust from 2008 to July 2011, including a term as board chair. ~~She has been a member of the board of directors of the Billings Chamber of Commerce since July 2009 and a member of the Billings Catholic School Board since December 2011.~~ From 2007 until December 31, 2011, she was a member of the Montana State University Engineering Advisory Council, whose responsibilities include evaluating the mission and goals of the College of Engineering and assisting in the development and implementation of the college’s strategic plan. From 2002 through 2006, she served on the Montana Board of Investments, the state agency responsible for prudently investing state funds. From 2001 to 2005, she served on the board of Montana State University’s Advanced Technology Park. From 1998 ~~to 2007,~~through 2006, she served on the ZooMontana Board and as vice chair from 2005 tothrough 2006.

		The board concluded that Ms. Fagg should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. Construction and engineering, energy, and the responsible development of natural resources are all important aspects of our business. Ms. Fagg has business experience in all these areas, including 17 years of construction and engineering experience at DOWL HKM and its predecessor, HKM Engineering, Inc., where she served as vice president, president, and chairman. Ms. Fagg ~~has~~ also ~~had~~has 14 years of experience in energy research and development at MSE, Inc., where she served as vice president of operations and corporate development director, and four years focusing on stewardship of natural resources as director of the Montana Department of Natural Resources and Conservation. In addition to her industry experience, Ms. Fagg brings to our board 13over 20 years of business leadership and management experience, including over 8 years as president and chairman of her own company, as well as knowledge and experience acquired through her service on a number of Montana state and community boards.


		David L. Goodin	Director Since January 4, 2013
		Age 5152	President and Chief Executive Officer

		Mr. Goodin was elected president and chief executive officer and a director of the company effective January 4, 2013. Prior to that, he served as chief executive officer and president of Intermountain Gas Company effective October 2008, chief executive officer of Cascade Natural Gas Corporation, Montana-Dakota Utilities Co., and Great Plains Natural Gas Co. effective June 2008, president of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. effective March 2008, and president of Cascade Natural Gas Corporation effective July 2007. He began his career with the company in 1983 at Montana-Dakota Utilities Co., where he served as a division electrical engineer effective May 1983, division electric superintendent effective February 1989, electric systems supervisor effective August 1993, electric systems manager effective April 1999, vice president-operations effective January 2000, and executive vice president-operations and acquisitions effective January 2007. He additionally serves as an executive officer and as chairman of the company’s principal subsidiaries and of the managing committees of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co.



	4	MDU Resources Group, Inc. Proxy Statement

Proxy Statement


	Mr. Goodin has a bachelor of science degree in electrical and electronics engineering from North Dakota State University, a masters in business administration from the University of North Dakota, and has completed the Advanced Management Program at Harvard School of Business. Mr. Goodin is a registered professional engineer in North Dakota. He is a member of the U.S. Bancorp Western North Dakota Advisory Board. Mr. Goodin is involved in numerous civic organizations, including serving on the board of directors of Sanford Bismarck, the Missouri Valley YMCA, and as trustee for the Bismarck State College Foundation. He is a past board member of several industry associations, including the American Gas Association, the Edison Electric Institute, the North Central Electric Association, the Midwest ENERGY Association, and the North Dakota Lignite Council. Mr. Goodin received the University of Mary Entrepreneurship Award in 2009.



4	~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~


		The board concluded that Mr. Goodin should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. As chief executive officer of MDU Resources Group, Inc., Mr. Goodin is one of only two officers of the company to sit on our board. With over 2930 years of significant, hands-on experience at our company, Mr. Goodin’s long history and deep knowledge and understanding of MDU Resources Group, Inc., its operating companies, and its lines of business ~~will~~ bring continuity to the board. Mr. Goodin has demonstrated his leadership abilities and his commitment to our company through his long service to the company and more recently as chief executive officer and president of the four utility companies. He demonstrated strong leadership skills in integrating Cascade Natural Gas Corporation and Intermountain Gas Company while meeting and exceeding profitability goals. The board’s unanimous election of Mr. Goodin to succeed ~~Mr.~~Terry D. Hildestad as our president and chief executive officer in January 2013 was ~~a result~~in recognition of ~~our comprehensive succession planning process led by~~ the board of directors during which the board had the opportunity to interact with and evaluate our executive officers. The board selected Mr. Goodin because it became clear to the board through this processboard’s belief that he ~~had~~has the strategic vision, operational experience, passion, and values to lead the future growth of the company. The board believes these characteristics make him well-suited to serve on our board, particularly in this challenging economic environment.

	Mark A. Hellerstein	Director Since 2013
	Age 61	Audit Committee

	Mr. Hellerstein was chief executive officer of St. Mary Land & Exploration Company (now SM Energy Company), an energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids, from 1995 until February 2007; he was president from 1992 until June 1996 and executive vice president and chief financial officer from 1991 until 1992. He was first elected to the board of St. Mary in 1992 and served as chairman of the board from 2002 until May 2009. Prior to joining St. Mary, from 1980 to 1991 Mr. Hellerstein’s career included positions as chief financial officer of CoCa Mines Inc., which mined and extracted minerals from lands previously held by the public through the Bureau of Land Management; American Golf Corporation, which manages golf courses in the United States; and, Worldwide Energy Corporation, an oil and gas acquisition, exploration, development, and production company with operations in the United States and Canada. Mr. Hellerstein served on the board of directors of Transocean Inc., a leading provider of offshore drilling services for oil and gas wells, from December 2006 to November 2007.

	Mr. Hellerstein’s leadership has been recognized with induction into the Rocky Mountain Oil and Gas Hall of Fame, and Ernst & Young named Mr. Hellerstein both Rocky Mountain and National Entrepreneur of the Year in 2005 and 2006, respectively. He graduated number one in his class with a bachelor’s degree in accounting from the University of Colorado. Mr. Hellerstein is a certified public accountant (CPA), on inactive status. He received the Elijah Watts Sells Gold Medal award for achieving the highest score in the United States on the November 1974 CPA exam out of 38,000 participants. Mr. Hellerstein has served on the board for Community Resources, Inc. since September 2013, which is a non-profit organization that brings programs into the Denver Public Schools to enhance education. He served as a board director on the Denver Children’s Advocacy Center (Center) from August 2006 until December 2011, including as chairman the last three years, and continues to participate in and fund the Center’s Safe from the Start Program. The Center’s mission is to provide a continuum of care for traumatized children and their families.

	The board concluded that Mr. Hellerstein should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. MDU Resources Group, Inc. derives a significant portion of its earnings from oil and natural gas production, one of the company’s growth centers. Mr. Hellerstein has extensive business experience, recognized excellence, and demonstrated success and leadership in this industry as a result of his 17 years of senior management experience and service as board chairman of St. Mary. His skills and experience enable him to contribute independent insight into the company’s business and operations and the economic environment and long-term strategic issues the company faces. As a certified public accountant, on inactive status, with extensive financial experience as a result of his employment as chief financial officer with several companies, including public companies, Mr. Hellerstein contributes significant finance and accounting knowledge to our board and audit committee. His financial expertise assists the board in its oversight of the company’s financial reporting and financial risk management functions. Mr. Hellerstein also brings to the board his knowledge of local, state, and regional issues involving the Rocky Mountain region where we have important operations.



MDU Resources Group, Inc. Proxy Statement	5

Proxy Statement


A. Bart Holaday	Director Since 2008
	Age 7071	Audit Committee
		Nominating and Governance Committee

	Mr. Holaday headed the Private Markets Group of UBS Asset Management and its predecessor entities for 15 years prior to his retirement in 2001, during which time he managed more than $19 billion in investments. Prior to that he was vice president and principal of the InnoVen Venture Capital Group, a venture capital investment firm. He was founder and president of Tenax Oil and Gas Corporation, an onshore Gulf Coast exploration and production company, from 1980 through 1982. He has four years of senior management experience with Gulf Oil Corporation, a global energy and petrochemical company, and eight years of senior management experience with the federal government, including the Department of Defense, Department of the Interior, and the Federal Energy Administration. He is currently the president and owner of Dakota Renewable Energy Fund, LLC, which invests in small companies in North Dakota. He is a member of the investment advisory board of Commons Capital LLC, a venture capital firm; is a director of Hull Investments, LLC, a private entity that combines nonprofit activities and investments; is a member of the board of directors of Adams Street Partners, LLC, a private equity investment firm, Alerus Financial, a financial services company, Jamestown College, the United States Air Force Academy Endowment (former chairman), the Falcon Foundation (director and former vice president), which provides scholarships to Air Force Academy applicants, the Center for Innovation Foundation at the University of North Dakota (trustee and former chairman), and ~~the University~~Discover Goodwill of ~~North Dakota Foundation;~~southern and western Colorado, a non-profit organization providing job training, placement, and retention programs for people transitioning from welfare to work; and is chairman and chief executive officer of the Dakota Foundation, a nonprofit foundation that fosters social ~~entrepreneurship;~~entrepreneurship. He is a past member of the board of directors of the University of North Dakota Foundation, National Venture Capital Association, Walden University, and the U.S. Securities and Exchange Commission advisory committee on the regulation of capital markets, and is a past member of the board of trustees for The Colorado Springs Child Nursery Centers Foundation, a non-profit organization that supports the operations of Early Connections Learning Centers, a non-profit child care organization in Colorado, and Discover Goodwill of southern and western Colorado, a non-profit organization providing job training, placement, and retention programs for people transitioning from welfare to work. He is a past member of the board of directors of the National Venture Capital Association, Walden University, and the U.S. Securities and Exchange Commission advisory committee on the regulation of capital markets.Colorado.

	Mr. Holaday has a bachelor’s degree in engineering sciences from the U.S. Air Force Academy. He was a Rhodes Scholar, earning a bachelor’s degree and a master’s degree in politics, philosophy, and economics from Oxford University. He also earned a law degree from George Washington Law School and is a Chartered Financial Analyst. In 2005, he was awarded an honorary Doctor of Letters from the University of North Dakota.

	The board concluded that Mr. Holaday should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. MDU Resources Group, Inc. has significant operations in the natural gas and oil industry where Mr. Holaday has knowledge and experience. He founded and served as president of Tenax Oil and Gas Corporation. He has four years experience in senior management with Gulf Oil Corporation and 16 years of experience managing private equity investments, including investments in oil and gas, as the head of the Private Markets Group of UBS Asset Management and its predecessor organizations. This business experience demonstrates his leadership skills and success in the oil and gas industry. Mr. Holaday brings to the board his extensive finance and investment experience, as well as his business development skills acquired through his work at UBS Asset Management, Tenax Oil and Gas Corporation, Gulf Oil Corporation, and several private equity investment firms. This will enhance the knowledge of the board and provide useful insights and guidance to management in connection not only with our natural gas and oil business, but with all of our businesses.



~~MDU Resources Group, Inc.~~~~Proxy Statement~~	5

~~Proxy Statement~~


	Dennis W. Johnson	Director Since 2001
	Age 6364	Audit Committee

	Mr. Johnson is chairman, chief executive officer, and president of TMI Corporation, and chairman and chief executive officer of TMI Systems Design Corporation, TMI Transport Corporation, and TMI Storage Systems Corporation, all of Dickinson, North Dakota, manufacturers of casework and architectural woodwork. He has been employed at TMI since 1974 serving as president or chief executive officer since 1982. Mr. Johnson is serving his ~~thirteenth~~fourteenth year as president of the Dickinson City Commission. He served as a director of the Federal Reserve Bank of Minneapolis from 1993 to 1998. He is a past member and chairman of the Theodore Roosevelt Medora Foundation.

Mr. Johnson has a bachelor of science degree in electrical and electronics engineering, as well as a master of science degree in industrial engineering from North Dakota State University. He has served on numerous industry, state, and community boards, including the North Dakota Workforce Development Council (chairperson), the Decorative Laminate Products Association, the North Dakota Technology Corporation, St. Joseph Hospital Life Care Foundation, St. John Evangelical Lutheran Church, Dickinson State University Foundation,



	6	MDU Resources Group, Inc. Proxy Statement

Proxy Statement


	the executive operations committee of the University of Mary Harold Schafer Leadership Center, the Dickinson United Way, and the business advisory council of the Steffes Corporation, a metal manufacturing and engineering firm. He also served on North Dakota Governor Sinner’s Education Action Commission, the North Dakota Job Service Advisory Council, the North Dakota State University President’s Advisory Council, North Dakota Governor Schafer’s Transition Team, and chaired North Dakota Governor Hoeven’s Transition Team. He has received numerous awards including the 1991 Regional Small Business Person of the Year Award and the Greater North Dakotan Award.

		The board concluded that Mr. Johnson should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. Mr. Johnson has over 3839 years of experience in business management, manufacturing, and finance, and has demonstrated his success in these areas, holding positions as chairman, president, and chief executive officer of TMI for 3132 years, as well as through his prior service as a director of the Federal Reserve Bank of Minneapolis. His finance experience and leadership skills enable him to make valuable contributions to our audit committee, which he has chaired for ~~nine~~ten years. As a result of his service on a number of state and local organizations in North Dakota, Mr. Johnson has significant knowledge of local, state, and regional issues involving North Dakota, a state where we have significant operations and assets.


	~~Thomas C. Knudson~~William E. McCracken	Director Since ~~2008~~2013
Age 71	Nominating and Governance Committee
	~~Age 66~~	~~Compensation Committee~~
Mr. McCracken served as chief executive officer of CA, Inc., one of the world’s largest information technology management software companies, from January 2010 until January 7, 2013, after which he served as executive adviser to the new chief executive officer until March 31, 2013, and after that as a consultant to the company until December 31, 2013. Mr. McCracken was a director of CA, Inc. from May 2005 until January 7, 2013, serving as non-executive chairman of the board from June 2007 to September 2009, interim executive chairman from September 2009 to January 2010, and executive chairman from January 2010 to May 2010. He is president of Executive Consulting Group, LLC, a general business consulting firm, since 2002. During his 36-year career with International Business Machines Corporation, a manufacturer of information processing products and a technology, software, and networking systems manufacturer and developer, Mr. McCracken held a number of executive positions, including general manager of IBM printing systems division from 1998 to 2001, general manager of marketing, sales, and distribution for IBM PC Company from 1994 to 1998, and president of IBM’s EMEA and Asia Pacific PC Company from 1993 to 1994. From 1995 to 2001, he served on IBM’s Chairman’s Worldwide Management Council, a group of the top 30 executives at IBM. Mr. McCracken was a director of IKON Office Solutions, Inc., a provider of document management systems and services, from 2003 to 2008, where he served on its audit committee, compensation committee, and strategy committee at various points in time during his tenure as a director.

Mr. ~~Knudson~~McCracken has a bachelor of science degree in physics and mathematics from Shippensburg University. He has served on the board of the National Association of Corporate Directors (NACD), a non-profit membership organization for corporate board members, since 2010, and was named by the NACD as one of the top 100 most influential people in the boardroom in 2009. He served on that organization’s 2009 blue ribbon commission on risk governance and in 2012 co-chaired its blue ribbon commission on board diversity. He was elected vice-chair and has been president of Tom Knudson Interests since its formation on January 14, 2004. Tom Knudson Interests provides consulting services in energy, sustainable development, and leadership. Mr. Knudson began employment with Conoco Oil Company (Conoco) in May 1975 and retired in 2004 from Conoco’s successor, ConocoPhillips, as senior vice president of human resources and government affairs and communications. Mr. Knudson served as a board member of ~~ConocoPhillips’ management committee. His diverse career~~the Millstein Center for Global Markets and Corporate Ownership at ~~Conoco~~Columbia University since 2013 and ~~ConocoPhillips included engineering, operations, business development, and commercial assignments. He was~~is the ~~founding~~New York chairman of the ~~Business Council for Sustainable Development in both the United States and the United Kingdom.~~chairman’s forum since 2011. He ~~has been a director of Bristow Group Inc. since June 2004 and its~~is board chairman of ~~the board~~Lutheran Social Ministries of ~~directors since August 2006,~~New Jersey, a charitable organization that provides adoption, assisted living, counseling, and ~~was a director of Natco Group Inc. from April 2005 to November 2009~~immigration and ~~Williams Partners LP from November 2005 to September 2007. Bristow Group Inc.~~refugee services, and also is a ~~leading provider~~board member of ~~helicopter services to the offshore oil industry. Natco Group Inc. is~~PENCIL, a leading manufacturer of oil and gas processing equipment. Williams Partners LP owns natural gas gathering, transportation, processing, and treating assets, and also has natural gas liquids fractionating and storage assets.nonprofit organization that partners businesses with public schools.

		Mr. Knudson has a bachelor’s degree in aerospace engineering from the U.S. Naval Academy and a master’s degree in aerospace engineering from the U.S. Naval Postgraduate School. He served as a naval aviator, flying combat missions in Vietnam, and was a lieutenant commander in 1974 when he was honorably discharged. He has served as an adjunct professor at the Jones Graduate School of Management at Rice University. Mr. Knudson has served on the boards of a number of petroleum industry associations, Covenant House Texas, and The Houston Museum of Natural Science. He has served on the National Council of Methodist Neurological Institute since October 2011, as a Trustee of the Episcopal Seminary of the Southwest, Austin, Texas, since February 2012, and as a board member of the National Association of Corporate Directors (NACD), Texas Tri-Cities Chapter, since December 2012. He holds the designation of Board Leadership Fellow from the NACD.



6	~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~


		The board concluded that Mr. ~~Knudson~~McCracken should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. AMr. McCracken has extensive executive leadership experience and significant ~~portion~~experience in information technology through his tenure at CA, Inc. and IBM. This experience coupled with his service as the chair or a member of ~~our earnings is derived from natural gas and oil production~~the board of other public companies and the ~~transportation, storage,~~NACD will enable him to provide insight into the operations, challenges, and ~~gathering~~complex issues our company is facing in today’s environment and to make significant contributions to the board’s oversight of ~~natural gas. Mr. Knudson has extensive knowledge~~operational risk management functions and ~~experience in this industry as a result of his prior employment with Conoco and ConocoPhillips, as well as through his service on the boards of Natco~~corporate governance.



MDU Resources Group, Inc. and Williams Partners LP. Mr. Knudson has a broad background in engineering, operations, and business development, as well as service on the management committee at Conoco and ConocoPhillips, which bring additional experience and perspective to our board. His service as senior vice president of human resources at ConocoPhillips makes him an excellent fit for our compensation committee. Sustainable business development is also an important aspect of our business, and Mr. Knudson, as the founding chairman of the Business Council for Sustainable Development, brings to our board significant experience and knowledge in this area. Mr. Knudson also has significant knowledge of local, state, and regional issues involving Texas, a state where we have important operations and assets. Proxy Statement	7

Proxy Statement


		Patricia L. Moss	Director Since 2003
		Age 5960	Compensation Committee
			Nominating and Governance Committee

		Ms. Moss served as the president and chief executive officer of Cascade Bancorp, a financial holding company in Bend, Oregon, from 1998 to January 3, 2012. She served as the chief executive officer of Cascade Bancorp’s principal subsidiary, Bank of the Cascades, from 1993 to January 3, 2012, serving also as president from 1993 to 2003. From 1987 to 1998, Ms. Moss served as chief operating officer, chief financial officer, and corporate secretary of Cascade Bancorp. Ms. Moss has been a director of Cascade Bancorp since 1993 and a director of Bank of the Cascades since 1998 and was elected vice chairman of both boards effective January 3, 2012. Ms. Moss also serves as a director of the Oregon Investment Fund Advisory Council, a state-sponsored program to encourage the growth of small businesses within Oregon, co-chairs the Oregon Growth Board, a state agency created to ~~provide recommendations~~improve access to ~~connect businesses to sources of~~ capital and create private-public partnerships, and serves on the City of Bend’s Juniper Ridge management advisory board.

		Ms. Moss graduated magna cum laude with a bachelor of science degree in business administration from Linfield College in Oregon and did master’s studies at Portland State University. She received commercial banking school certification at the ABA Commercial Banking School at the University of Oklahoma. She served as a director of the Oregon Business Council, whose mission is to mobilize business leaders to contribute to Oregon’s quality of life and economic prosperity; the Cascades Campus Advisory Board of the Oregon State University; the North Pacific Group, Inc., a wholesale distributor of building materials, industrial and hardwood products, and other specialty products; the Aquila Tax Free Trust of Oregon, a mutual fund created especially for the benefit of Oregon residents; Clear Choice Health Plans Inc., a multi-state insurance company; and as a director and chair of the St. Charles Medical Center.

		In August 2009, the Federal Deposit Insurance Corporation and the Oregon Division of Finance and Corporate Securities entered into a consent agreement with Bank of the Cascades that requires the bank to develop and adopt a plan to maintain the capital necessary for it to be “well-capitalized,” to improve its lending policies and its allowance for loan losses, to increase its liquidity, to retain qualified management, and to increase the participation of its board of directors in the affairs of the bank. In October 2009, the bank’s parent, Cascade Bancorp, entered into a written agreement with the Federal Reserve Bank of San Francisco and the Oregon Division relating largely to improving the financial condition of Cascade Bancorp and the Bank of the Cascades. Cascade Bancorp reported in its third quarter 2012 Form 10-Q that at December 31, 2011, Cascade Bancorp and the Bank did not meet the written agreement’s leverage ratio requirement and as a result they had filed a required update to their capital plan, which was accepted by their regulators. On September 30, 2012, Bancorp and the Bank had met this requirement. The order remains in place until lifted by the regulators.

		The board concluded that Ms. Moss should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. A significant portion of MDU Resources Group, Inc.’s utility, construction services, and contracting operations are located in the Pacific Northwest. Ms. Moss has first-hand business experience and knowledge of the Pacific Northwest economy and local, state, and regional issues through her executive positions at Cascade Bancorp and Bank of the Cascades, where she gained over 30 years of experience. Ms. Moss provides to our board her experience in finance and banking, as well as her experience in business development through her work at Cascade Bancorp and on the Oregon Investment Advisory Council, the Oregon Business Council, and the Oregon Growth Board. This business experience demonstrates her leadership abilities and success in the finance and banking industry. Ms. Moss is also certified as a Senior Professional in Human Resources, which makes her well-suited for our compensation committee. In deciding that Ms. Moss should be renominated as a director, the board was mindful of the consent agreement with Bank of the Cascades, but concluded that Ms. Moss brought the many skills and experiences discussed above to our board and had proved herself to be a dedicated and hard-working director.



~~MDU Resources Group, Inc.~~~~Proxy Statement~~	7

~~Proxy Statement~~


		Harry J. Pearce	Director Since 1997
		Age 7071	Chairman of the Board

		Mr. Pearce was elected chairman of the board of the company on August 17, 2006. Prior to that, he served as lead director effective February 15, 2001, and was vice chairman of the board from November 16, 2000 until February 15, 2001. Mr. Pearce has been a director and serves on the excellence, finance, and compensation committees of Marriott International, Inc., a major hotel chain, since 1995. He was a director of Nortel Networks Corporation, a global telecommunications company, from January 11, 2005 to August 10, 2009, serving as chairman of the board from June 29, 2005. He retired on December 19, 2003, as chairman of Hughes Electronics Corporation, a General Motors Corporation subsidiary and provider of digital television entertainment, broadband satellite network, and global video and data broadcasting. He had served as chairman since June 1, 2001. Mr. Pearce was vice chairman and a director of General Motors Corporation, one of the world’s largest automakers, from January 1, 1996 to May 31, 2001, and was general counsel from 1987 to 1994. He served on the President’s Council on Sustainable Development and co-chaired the President’s Commission on the United States Postal Service. Prior to joining General Motors, he was a senior partner in the Pearce & Durick law firm in Bismarck, North Dakota. Mr. Pearce is a director of the United States Air Force Academy Endowment and a member of the Advisory Board of the University of Michigan Cancer Center. He is a Fellow of the American College of Trial Lawyers and a member of the International Society of Barristers. He also serves on the Board of Trustees of Northwestern University. He has served as a chairman or director on the boards of numerous nonprofit organizations, including as chairman of the ~~board~~Board of Visitors of the U.S. Air Force Academy, chairman of the National Defense University Foundation, and chairman of the Marrow Foundation. Mr. Pearce received a bachelor’s degree in engineering sciences from the U.S. Air Force Academy and a juris doctor degree from Northwestern University’s School of Law.



	8	MDU Resources Group, Inc.Proxy Statement

Proxy Statement


	The board concluded that Mr. Pearce should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. MDU Resources Group, Inc. values public company leadership and the experience directors gain through such leadership. Mr. Pearce is recognized nationally, as well as in the State of North Dakota, as a business leader and for his business acumen. He has multinational business management experience and proven leadership skills through his position as vice chairman at General Motors Corporation, as well as through his extensive service on the boards of large public companies, including Marriott International, Inc.;, Hughes Electronics Corporation, where he was ~~chairman;~~chairman, and Nortel Networks Corporation, where he also was chairman. He also brings to our board his long experience as a practicing attorney. In addition, Mr. Pearce is focused on corporate governance issues and is the founding chair of the Chairmen’s Forum, an organization comprised of non-executive chairmen of publicly-traded companies. Participants in the Chairmen’s Forum discuss ways to enhance the accountability of corporations to owners and promote a deeper understanding of independent board leadership and effective practices of board chairmanship. The board also believes that Mr. Pearce’s values and commitment to excellence make him well-suited to serve as chairman of our board.


		J. Kent Wells	Director Since January 4, 2013
		Age 5657	Vice Chairman of the Corporation
			President and Chief Executive Officer
			of Fidelity Exploration & Production Company

		Mr. Wells was elected vice chairman of the ~~company~~corporation and a director effective January 4, 2013, and continues to serve as president and chief executive officer of Fidelity Exploration & Production Company, our natural gas and oil production business, the position for which he was hired effective May 2, 2011. Prior to that he was senior vice president of exploration and production for BP America, Inc. (BP) from June 2007 until October 2010, when he was named BP’s group senior vice president for global deepwater response until March 31, 2011. He also served as general manager of Abu Dhabi Company for Onshore Oil Operations from February 2005 until June 2007; vice president, Gulf of Mexico shelf, for BP from 2002 to 2005; vice president, Rockies, for BP from 2000 to 2002; general manager of Crescendo Resources LP from 1997 to 2000; manager, Hugoton, for Amoco Production Company, Inc. (Amoco) from 1993 to 1996; manager, operations, for Amoco in 1993; resource manager for Amoco from 1988 to 1993; executive assistant for Amoco from 1987 to 1988; engineering supervisor for Amoco Canada Petroleum Company (Amoco Canada) from 1983 to 1987; and petroleum engineer for Amoco Canada from 1979 to 1983. Mr. Wells received a bachelor’s degree in mechanical engineering from the Queen’s University, Kingston, Ontario, Canada in 1979.

		The board concluded that Mr. Wells should serve as director of MDU Resources Group, Inc. in light of our business and structure, at the time we file our proxy statement for the following reasons. A significant portion of our earnings is derived from natural gas and oil production. One of the company’s strategic objectives is to achieve product diversity in the midstream segment of the oil and gas industry. Mr. Wells brings to our board significant experience and knowledge of the oil and gas business, including the midstream segment. He has



8	~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~


		more than 3334 years of natural gas and oil experience, including several years in senior leadership positions at BP, the world’s third largest integrated oil company, and a publicly traded company. He was senior vice president of exploration and production for BP’s U.S. natural gas operations from 2007 until October 2010 with responsibility for BP’s onshore natural gas business throughout the United States, encompassing both exploration and production, and midstream business. His strong track record in natural gas and oil production includes experience in shale formations similar to the company’s current development focus. He has firsthand experience in the Rockies and Texas, where a large portion of Fidelity Exploration & Production Company’s reserves are concentrated. Mr. Wells’ combination of expertise and experience, along with his success in leadership roles with a large publicly traded company, will complement the skills of the current board members.


		John K. Wilson	Director Since 2003
		Age 5859	Audit Committee

		Mr. Wilson was president of Durham Resources, LLC, a privately held financial management company, in Omaha, Nebraska, from 1994 to December 31, 2008. He previously was president of Great Plains Energy Corp., a public utility holding company and an affiliate of Durham Resources, LLC, from 1994 to July 1, 2000. He was vice president of Great Plains Natural Gas Co., an affiliate company of Durham Resources, LLC, until July 1, 2000. The company bought Great Plains Energy Corp. and Great Plains Natural Gas Co. on July 1, 2000. Mr. Wilson also served as president of the Durham Foundation and was a director of Bridges Investment Fund, a mutual fund, and the Greater Omaha Chamber of Commerce. He is presently a director of HDR, Inc., an international architecture and engineering firm, Tetrad Corporation, a privately held investment company, both based in Omaha, and serves on the advisory board of Duncan Aviation, an aircraft service provider, headquartered in Lincoln, Nebraska. He currently serves as executive director of the Robert B. Daugherty ~~Charitable~~ Foundation, Omaha, Nebraska, and formerly served on the advisory board of U.S. Bank NA Omaha.



MDU Resources Group, Inc. Proxy Statement	9

Proxy Statement


	Mr. Wilson is a certified public accountant, on inactive status. He received his bachelor’s degree in business administration, cum laude, from the University of Nebraska – Omaha. During his career, he was an audit manager at Peat, Marwick, Mitchell (now known as KPMG), controller for Great Plains Natural Gas Co., and chief financial officer and treasurer for all Durham Resources entities.

		The board concluded that Mr. Wilson should serve as a director of MDU Resources Group, Inc., in light of our business and structure, at the time we file our proxy statement for the following reasons. Mr. Wilson has an extensive background in finance and accounting, as well as extensive experience with mergers and acquisitions, through his education and work experience at a major accounting firm and his later positions as controller and vice president of Great Plains Natural Gas Co., president of Great Plains Energy Corp., and president, chief financial officer, and treasurer for Durham Resources, LLC and all Durham Resources entities. The electric and natural gas utility business was our core business when our company was founded in 1924. That business now operates through four utilities: Montana-Dakota Utilities Co., Great Plains Natural Gas Co., Cascade Natural Gas Corporation, and Intermountain Gas Company. Mr. Wilson is our only non-employee director with direct experience in this area through his prior positions at Great Plains Natural Gas Co. and Great Plains Energy Corp. In addition, Mr. Wilson’s extensive finance and accounting experience make him well-suited for our audit committee.

The board of directors recommends a vote “for” each nominee.

A majority of votes cast is required to elect a director in an uncontested election. A majority of votes cast means the number of votes cast “for” a director’s election must exceed the number of votes cast “against” the director’s election. “Abstentions” and “broker non-votes” do not count as votes cast “for” or “against” the director’s election. In a contested election, which is an election in which the number of nominees for director exceeds the number of directors to be elected and which we do not anticipate, directors will be elected by a plurality of the votes cast.

Unless you specify otherwise when you submit your proxy, the proxies will vote your shares of common stock “for” all directors nominated by the board of directors. If a nominee becomes unavailable for any reason or if a vacancy should occur before the election, which we do not anticipate, the proxies will vote your shares in their discretion for another person nominated by the board.


•	receipt of a greater number of votes “against” than votes “for” election at our annual meeting of stockholders and

•	acceptance of such resignation by the board of directors.



~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~	9

~~Proxy Statement~~

Brokers may not vote your shares on the election of directors if you have not given your broker specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote can be counted.

ITEM 2. RATIFICATION OF INDEPENDENT ~~AUDITORS~~REGISTERED PUBLIC ACCOUNTING FIRM

The audit committee at its February ~~2013~~2014 meeting appointed Deloitte & Touche LLP as our independent ~~auditors~~registered public accounting firm for fiscal year ~~2013.~~2014. The board of directors concurred with the audit committee’s decision. Deloitte & Touche LLP has served as our independent ~~auditors~~registered public accounting firm since fiscal year 2002.

Although your ratification vote will not affect the appointment or retention of Deloitte & Touche LLP for ~~2013,~~2014, the audit committee will consider your vote in determining its appointment of our independent ~~auditors~~registered public accounting firm for the next fiscal year. The audit committee, in appointing our independent ~~auditors,~~registered public accounting firm, reserves the right, in its sole discretion, to change an appointment at any time during a fiscal year if it determines that such a change would be in our best interests.

A representative of Deloitte & Touche LLP will be present at the annual meeting and will be available to respond to appropriate questions. We do not anticipate that the representative will make a prepared statement at the meeting; however, he or she will be free to do so if he or she chooses.

The board of directors recommends a vote “for” the ratification of
Deloitte & Touche LLP as our independent ~~auditors~~registered public accounting firm for ~~2013.~~2014.



	10	MDU Resources Group, Inc. Proxy Statement

Proxy Statement
Ratification of the appointment of Deloitte & Touche LLP as our independent ~~auditors~~registered public accounting firm for ~~2013~~2014 requires the affirmative vote of a majority of our common stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. Abstentions will count as votes against this proposal.
~~ACCOUNTING AND AUDITING MATTERS~~Accounting and Auditing Matters
Fees
The following table summarizes the aggregate fees that our independent ~~auditors,~~registered public accounting firm, Deloitte & Touche LLP, billed or ~~are~~is expected to bill us for professional services rendered for ~~2012~~2013 and ~~2011:~~2012:

2012

2011
*

Audit Fees (a)

$
2,400,000

$
2,456,046

Audit-Related Fees(b)

63,110

216,410

Tax Fees(c)

23,566

0

All Other Fees(d)

0

0

Total Fees(e)

$
2,486,676

$
2,672,456

Ratio of Tax and All Other Fees to Audit and Audit-Related Fees

0.96
%

0.00
%

*
The 2011 amounts were adjusted from amounts shown in the 2012 proxy statement to reflect actual amounts.
(a)
Audit fees for 2012 and 2011 consisted of services rendered for the audit of our annual financial statements, reviews of quarterly financial statements, statutory and regulatory audits, compliance with loan covenants, reviews of financial statements for MDU Construction Services Group, Inc. and subsidiaries, agreed upon procedures associated with the annual submission of financial assurance to the North Dakota Department of Health, filing Form S-3 registration statements (2011 only), and work related to responding to a comment letter from the Securities and Exchange Commission (2011 only).
(b)
Audit-related fees for 2012 and 2011 are associated with accounting research assistance, workpaper review requested by the Idaho Public Utilities Commission (2012 only), the compliance audit for the U.S. Department of Energy (2012 only), and accounting consultation in connection with due diligence (2011 only).
(c)
Tax fees for 2012 relate to the review of permanent tax benefits associated with Medicare Part D subsidies. There were no tax fees for 2011.
(d)
There were no all other fees for 2012 and 2011.
(e)
Total fees reported above include out-of-pocket expenses related to the services provided of $332,210 for 2012 and $305,346 for 2011.

10
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

2013

2012
*

Audit Fees (a) (e)

$
2,760,620

$
2,510,138

Audit-Related Fees (b)

33,800

63,110

Tax Fees (c) (e)

66,049

23,745

All Other Fees (d)

1,374,455

0

Total Fees (f)

$
4,234,924

$
2,596,993

Ratio of Tax and All Other Fees to Audit and Audit-Related Fees

51.55
%

0.92
%

*
The 2012 amounts were adjusted from amounts shown in the 2013 proxy statement to reflect actual amounts.
(a)
Audit fees for 2013 and 2012 consist of services rendered for the audit of our annual financial statements, reviews of quarterly financial statements, statutory and regulatory audits, compliance with loan covenants, reviews of financial statements for MDU Construction Services Group, Inc. and subsidiaries, agreed upon procedures associated with the annual submission of financial assurance to the North Dakota Department of Health, comfort letter work relating to the offering of common stock (2013 only), and work related to responding to a comment letter from the Securities and Exchange Commission (2013 only).
(b)
Audit-related fees for 2013 and 2012 are associated with accounting research assistance, technical accounting consultation regarding variable interest entities, guarantees, and financing agreements (2013 only), workpaper review requested by the Idaho Public Utilities Commission (2012 only), and the compliance audit for the U.S. Department of Energy (2012 only).
(c)
Tax fees for 2013 relate to consulting services for federal income tax pollution control associated with the Big Stone power plant. Tax fees for 2012 relate to the review of permanent tax benefits associated with Medicare Part D subsidies.
(d)
All other fees for 2013 relate to assistance in an internal investigation. There were no fees in this category for 2012.
(e)
Audit fees for 2013 include $30,000 associated with a financial statement audit, and tax fees for 2013 include $50,000 associated with tax services, in each case for Dakota Prairie Refining, LLC. These fees are paid by Dakota Prairie Refining, LLC, but are included in this table because Dakota Prairie Refining, LLC, is considered a variable interest entity with respect to MDU Resources and consolidated in its financial statements.
(f)
Total fees reported above include out-of-pocket expenses related to the services provided of $385,216 for 2013 and $353,627 for 2012.

Pre-Approval Policy
The audit committee pre-approved all services Deloitte & Touche LLP performed in ~~2012~~2013 in accordance with the pre-approval policy and procedures the audit committee adopted at its August 12, 2003 meeting. This policy is designed to achieve the continued independence of Deloitte & Touche LLP and to assist in our compliance with Sections 201 and 202 of the Sarbanes-Oxley Act of 2002 and related rules of the Securities and Exchange Commission.
The policy defines the permitted services in each of the audit, audit-related, tax, and all other services categories, as well as prohibited services. The pre-approval policy requires management to submit annually for approval to the audit committee a service plan describing the scope of work and anticipated cost associated with each category of service. At each regular audit committee meeting, management reports on services performed by Deloitte & Touche LLP and the fees paid or accrued through the end of the quarter preceding the meeting. Management may submit requests for additional permitted services before the next scheduled audit committee meeting to the designated member of the audit committee, Dennis W. Johnson, for approval. The designated member updates the audit committee at the next regularly scheduled meeting regarding any services that he approved during the interim period. At each regular audit committee meeting, management may submit to the audit committee for approval a supplement to the service plan containing any request for additional permitted services.
In addition, prior to approving any request for audit-related, tax, or all other services of more than $50,000, Deloitte & Touche LLP will provide a statement setting forth the reasons why rendering of the proposed services does not compromise Deloitte & Touche LLP’s independence. This description and statement by Deloitte & Touche LLP may be incorporated into the service plan or as an exhibit thereto or may be delivered in a separate written statement.
MDU Resources Group, Inc. Proxy Statement
11

Proxy Statement
ITEM 3. APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
In accordance with Section 14A of the Securities Exchange Act of 1934 and Rule 14a-21(a), we are asking our stockholders to approve, in a separate advisory vote, the compensation of our named executive officers as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K. As discussed in the ~~compensation discussion~~Compensation Discussion and ~~analysis,~~Analysis, our compensation committee and board of directors believe that our current executive compensation program directly links compensation of our named executive officers to our financial performance and aligns the interests of our named executive officers with those of our stockholders. Our compensation committee and board of directors also believe that our executive compensation program provides our named executive officers with a balanced compensation package that includes an appropriate base salary along with competitive annual and long-term incentive compensation targets. These incentive programs are designed to reward our named executive officers on both an annual and long-term basis if they attain specified goals.
Our overall compensation program and philosophy is built on a foundation of these guiding principles:

•
we pay for performance, with over 50% of our ~~2012~~2013 total target direct compensation in the form of incentive compensation, except in the case of one officer promotion where his incentive compensation was 47% of his total target direct compensation

•
we assess the relationship between our named executive officers’ pay and performance on key financial metrics – revenue, profit, return on invested capital, and stockholder return – in comparison to our performance graph peer group

•
we review competitive compensation data for our named executive officers, to the extent available, and incorporate internal equity in the final determination of target compensation levels

•
we determine annual performance incentives based on financial criteria that are important to stockholder value, including earnings, earnings per share and return on invested capital and

•
we determine long-term performance incentives based on total stockholder return relative to our performance graph peer group.
We are asking our stockholders to indicate their approval of our named executive officer compensation as disclosed in this proxy statement, including the ~~compensation discussion~~Compensation Discussion and ~~analysis,~~Analysis, the executive compensation tables, and narrative discussion. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers for ~~2012.~~2013. Accordingly, the following resolution is submitted for stockholder vote at the ~~2013~~2014 annual meeting:
“RESOLVED, that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby ~~APPROVED.~~APPROVED.”
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
11

~~Proxy Statement~~
As this is an advisory vote, the results will not be binding on the company, the board of directors, or the compensation committee and will not require us to take any action. The final decision on the compensation of our named executive officers remains with our compensation committee and our board of directors, although our board and compensation committee will consider the outcome of this vote when making future compensation decisions. As the board of directors determined at its meeting in May 2011, we will provide our stockholders with the opportunity to vote on our named executive officer compensation at every annual meeting until the next required vote on the frequency of stockholder votes on named executive officer compensation. The next required vote on frequency will occur at the 2017 annual meeting of stockholders.
The board of directors recommends a vote “for” the approval, on a non-binding advisory basis, of
the compensation of our named executive officers, as disclosed in this proxy statement.
Approval of the compensation of our named executive officers requires the affirmative vote of a majority of our common stock present in person or represented by proxy at the meeting and entitled to vote on the proposal. Abstentions will count as votes against this proposal. Broker non-votes are not counted as voting power present and, therefore, are not counted in the vote.
12
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following ~~compensation discussion~~Compensation Discussion and ~~analysis~~Analysis may contain statements regarding corporate performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.
Executive Summary
~~Summary of Company Performance and~~ Named Executive ~~Officer Compensation – 2012 Compared to 2011~~Officers
Our named executive officers for ~~2012~~2013 were:

•
David L. Goodin, who became president and chief executive officer of MDU Resources Group, Inc. on January 4, 2013; Mr. Goodin was not a named executive officer last year

•
Terry D. Hildestad, our former president and chief executive officer, who retired on January 3, 2013

•
Doran N. Schwartz, our vice president and chief financial officer

•
~~William E. Schneider, our executive vice president of Bakken development, a role he assumed on January 1, 2012~~
•
J. Kent Wells, ~~who led~~ our ~~exploration~~vice chairman and ~~production segment as~~the president and chief executive officer of our exploration and production business segment, Fidelity Exploration & Production Company, a direct wholly-owned subsidiary of WBI Holdings, Inc.
•
Jeffrey S. Thiede, who became president and chief executive officer of our construction services business segment, MDU Construction Services Group, Inc., effective April 30, 2013; Mr. Thiede was not a named executive officer last year and

•
~~Steven L. Bietz, who led~~Paul K. Sandness, our ~~pipeline~~general counsel and ~~energy services segment as president and chief~~secretary; Mr. Sandness was not a named executive officer ~~of WBI Holdings, Inc., which is the parent company of WBI Energy, Inc. and WBI Energy Services, Inc.~~
~~In addition to the business segments above, we have the following business segments:~~
•
~~electric and natural gas distribution~~¹under the leadership of David L. Goodin, who was during 2012 the president and chief executive officer of Montana-Dakota Utilities Co., Great Plains Natural Gas Co., Cascade Natural Gas Corporation, and Intermountain Gas Company, and who was promoted, effective January 4, 2013, to be president and chief executive officer of MDU Resources Group, Inc., and
•
construction services segment and construction materials and contracting segment under the leadership of John G. Harp, who is the chief executive officer of MDU Construction Services Group, Inc. and Knife River Corporation.

1
~~Natural gas distribution is a separate business segment, although we are showing it combined in this discussion.~~

12
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~
last year.
SinceMr. Hildestad retired at the beginning of the year and received no increase in base salary or incentive compensation for 2013, we do not discuss Mr. Hildestad further in the Compensation Discussion and Analysis.
The chief executive officer of the construction services and construction materials and contracting business segments retired in April 2013. His responsibilities were divided between Jeffrey S. Thiede, who was promoted from president to president and chief executive officer of the construction services segment, and David C. Barney, who was promoted from president to president and chief executive officer of the construction materials and contracting segment and is not a named executive officer.
Key Financial Results for ~~2012 and 2011~~
~~Our consolidated financial results for 2012 was~~2013
Consolidated GAAP earnings in 2013 were $278.2 million, or $1.47 cents per share, compared to a loss of $1.4 million, or 1 cent per share, in 2012.
Our total stockholder return for 2013 was 47.5%, as compared to ~~2011 earnings of $212.3 million. Adjusted earnings were $216.8 million~~2.1% for ~~2012,~~2012. Our average annual total stockholder return for the five-year period ended December 31, 2013 was 10.5%, compared to ~~2011 adjusted earnings of $225.2 million. The following table compares 2012 results to 2011 results on a business segment basis. Adjusted earnings and information in~~(2.3)% for the ~~table below contain non-GAAP numbers. Please refer to the Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Adjusted Earnings sections below.~~five-year period ended December 31, 2012.

Business Segment

2012 Earnings
($) (millions)

2011 Earnings
($) (millions)

Electric and Natural Gas Distribution

60.0

67.6

Pipeline and Energy Services

11.6

23.1

Exploration and Production

69.6

80.3

Construction Materials and Services

70.8

48.0

Other

4.8

6.2

Earnings Before Discontinued Operations, Noncash Write-Downs of Oil and Natural Gas Properties, and Net Benefit Related to Natural Gas Gathering Operations Litigation

216.8

225.2

Income (Loss) from Discontinued Operations, Net of Tax*

13.6

(12.9
)
Effects of Noncash Write-Downs of Oil and Natural Gas Properties

(246.8
)

—

Net Benefit Related to Natural Gas Gathering Operations Litigation

15.0

—

Earnings (Loss) on Common Stock

(1.4
)

212.3

*
~~Reflects a 2012 reversal of a 2011 arbitration charge of $13.0 million after tax related to a guarantee of a construction contract~~
~~Use of Non-GAAP Financial Measures~~
~~As noted above,~~In 2013 the company ~~in addition~~generated a 7.2% return on invested capital compared to ~~presenting its earnings information in conformity with Generally Accepted Accounting Principles (GAAP), has provided non-GAAP earnings data that reflects an adjustment to exclude~~ a fourth quarter 2012 $145.9 million after-tax noncash ceiling test write-down, a third quarter 2012 $100.9 million after-tax noncash ceiling test write-down, as well as an adjustment to exclude a second quarter 2012 reversal6.7% weighted average cost of an arbitration charge of $15.0 million after-tax. The company believes that these non-GAAP financial measures are useful to investors because the items excluded are not indicative of the company’s continuing operating results. Also, the company’s management uses these non-GAAP financial measures as indicators for planning and forecasting future periods. The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance with GAAP.capital.
~~Reconciliation of GAAP to Adjusted Earnings~~

2012
Earnings
($) (millions)

2011
Earnings
($) (millions)

2012
Earnings
Per Share

2011
Earnings
Per Share

Earnings (Loss) on Common Stock

(1.4
)

212.3

(0.01
)

1.12

Discontinued Operations

(13.6
)

12.9

(0.07
)

0.07

Noncash Write-Downs of Oil and Natural Gas Properties

246.8

—

1.31

—

Net Benefit Related to Natural Gas Gathering Operations Litigation

(15.0
)

—

(0.08
)

—

Adjusted Earnings

216.8

225.2

1.15

1.19

Total Realized Pay ~~in 2012 and 2011~~
Compared to Total Compensation from the Summary Compensation Table
The compensation committee believes considering total realized pay, the actual remuneration received by the named executive, is equally as important as considering total compensation as presented in the ~~summary~~Summary Compensation Table. Total realized pay reflects the compensation ~~table.~~ actually earned, which can differ substantially from total compensation as presented in the Summary Compensation Table.
Total compensation as presented in the ~~summary compensation table~~Summary Compensation Table contains estimated values of grants of performance shares based on multiple assumptions that may or may not come to fruition. ~~Also,~~In addition, the ~~summary compensation table shows~~Summary Compensation Table may show an increase in change in pension value and above-market earnings on nonqualified deferred ~~compensation.~~compensation, depending on the valuation assumptions and discount rates used to calculate present value of pension benefits. The pension plan was frozen as of December 31, 2009, and none of the named executives’ benefit levels in the Supplemental Income Security Plan, our non-qualified retirement program, increased for 2012. The primary reason for increases in thecompany excludes change in pension value ~~is due to a lower discount rate used to calculate the values.~~
~~Total realized pay,~~and above-market earnings on ~~the other hand, reflects the~~nonqualified deferred compensation actually earned, including the value of incentive awards if the goals are met and excluding the value of incentive awards if the goals are not met. Because we have not met certain performance measures in the last several years, our named executive officers’from total realized pay excludes the value of incentive awards that were not earned. We define total realized pay as the sum of base salary, annual incentive award paid, the value realized upon the vesting of long-term incentive awards of performance shares, and all other compensation as reported in the summary compensation table.because:
~~MDU Resources Group, Inc.~~~~Proxy Statement~~
13

~~Proxy Statement~~
~~The following table compares total realized pay for our named executives in 2012 to 2011.~~

Named Executive Officer

Year

Base Salary
($)

Annual
Incentive
Awards
and
Bonus
Paid
($)

Value
Realized
upon
Vesting of
Performance
Shares
($)

All
Other
Compensation
($)

Total
Realized
Pay
($)

Terry D. Hildestad

2012

750,000

518,250

0(1)

38,224

1,306,474

2011

750,000

954,750

0(2)

37,499

1,742,249

Doran N. Schwartz

2012

300,000

103,650

0(1)

34,224

437,874

2011

273,000

173,765

0(2)

33,549

480,314

Steven L. Bietz

2012

360,500

347,973

0(1)

37,884

746,357

2011

360,500

229,198

0(2)

37,159

626,857

J. Kent Wells

2012

550,000

934,042
(3)

N/A

96,470

1,580,512

2011

367,671

1,923,991
(4)

N/A

84,580

2,376,242

William E. Schneider

2012

447,400

200,950

0(1)

38,224

686,574

2011

447,400

436,215

0(2)

37,499

921,114

~~(1)~~
~~Performance shares and dividend equivalents granted for the 2009-2011 performance period that did not vest and were forfeited because performance was below threshold.~~
~~(2)~~
~~Performance shares and dividend equivalents granted for the 2008-2010 performance period that did not vest and were forfeited because performance was below threshold.~~
~~(3)~~
Reflects the value of the portion of Mr. Wells’ additional 2011 annual incentive award that was paid in shares of our common stock based on our closing stock price of $21.67 on the vesting date, February 16, 2012.
~~(4)~~
Mr. Wells was hired as president and chief executive officer of Fidelity Exploration & Production Company effective May 2, 2011. Includes a cash recruitment payment of $550,000, annual incentive payment of $448,981, and additional annual incentive payment of $925,010.
Our named executive officers forfeited all performance shares and dividend equivalents for the 2009-2011 performance period because our total stockholder return in comparison to our peer group was at the 25th percentile. With respect to the annual incentive awards, our 2012 results in the construction services segment, construction materials and contracting segment, and the pipeline and energy services segment were above their performance targets, and, conversely, 2012 results for the exploration and production segment and the electric and gas distribution segments were below their threshold performance goals, with 2012 consolidated earnings per share results also below threshold. Since the corporate named executives’ annual incentives depend on achievement of the foregoing performance goals, Messrs. Hildestad’s, Schwartz’s, and Schneider’s 2012 annual incentives were paid below the target amount.
~~With respect to our chief executive officer, the following table further demonstrates our pay for performance approach by comparing:~~

•
~~his~~increase in change in pension value can have a large impact on total ~~realized pay, which is~~compensation as reported in the ~~sum of base salary, annual incentive awards paid, all other compensation, and the value realized upon the~~Summary Compensation Table

•
o
~~vesting~~for some of ~~restricted stock during 2010~~our named executive officers for 2013, the change in pension value was negative due to the use of a higher discount rate to calculate present value; however, unlike when the value is positive, the negative value does not reduce total compensation as reported in the Summary Compensation Table and

o
~~vesting of performance shares during 2008, 2009, and 2010 (none vested in 2011 or 2012)~~
•
~~his total compensation as reported in the summary compensation table and~~
•
~~one-year total stockholder returns for 2008 through 2012.~~

14
~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~
~~5 Year CEO Compensation and Total Stockholder Return~~

2008

2009

2010

2011

2012

Total Realized Pay

$1,689,799

$2,657,250

$2,344,221

$1,742,249

$1,306,474

Total Compensation
from Summary
Compensation Table

$3,119,702

$4,203,004

$2,860,918

$3,566,327

$2,558,778

1 Year Total
Stockholder Return

-20.1%

12.9%

-11.3%

9.1%

2.1%

~~The yearly changes in total compensation from the summary compensation table and total realized pay align very closely with the yearly changes in total stockholder return.~~
~~Overview of 2012 Compensation for our Named Executive Officers~~
In 2012, we continued our approach of referencing market data to establish competitive pay levels for base salary, total annual cash, which is base salary plus target annual incentive, and total direct compensation, which is the sum of total annual cash plus the expected value of target long-term incentives. We discuss this competitive assessment in the Role of Management section below. To ensure compensation awarded to named executive officers was commensurate with competitive performance levels, we continued to compare:
•
~~total stockholder return results to the results of our performance graph peer group to determine payouts under our performance share program and~~
•
on a historical basis, our targeted and actual results on return on invested capital to the results of our performance graph peer group when the compensation committee established performance targets for annual incentives of our business segment leaders.
~~Our overall compensation program and philosophy is built on a foundation of these guiding principles:~~
•
~~we pay for performance, with 55.6% to 76.5% of our named executive officers’ 2012 total target direct compensation in the form of incentives~~
•
~~we determine annual performance incentives based on financial criteria that are important to stockholder value, including earnings per share and return on invested capital~~
•
~~we determine long-term performance incentives based on total stockholder return relative to our performance graph peer group~~
•
~~we review competitive compensation data for our named executive officers, to the extent available, and incorporate internal equity in the final determination of target compensation levels and~~
•
through our PEER Analysis, we compare our pay-for-performance results on key financial metrics – revenue, profit, return on invested capital, and stockholder return – in comparison to our performance graph peer group.
~~The compensation committee took the following actions with respect to 2012 compensation for our named executive officers:~~
•
granted a salary increase to Mr. Hildestad to recognize his effective leadership during an extended period of economic softness. Mr. Hildestad subsequently rejected the salary increase because he felt accepting the increase would be out of place since five of the thirteen Section 16 officers did not receive an increase for 2012
•
~~granted a salary increase to Mr. Schwartz to bring his salary closer to his salary grade midpoint~~

MDU Resources Group, Inc. Proxy Statement
1513

Proxy Statement

•
~~tied 25%~~the change in pension value is the difference in the present value of our ~~business segment leaders’ 2012 annual incentive targets to~~qualified defined benefit retirement plan and our Supplemental Income Security Plan benefits, and the ~~company’s 2012 earnings per share results~~Supplemental Income Security Plan benefits partially depend on continued future employment in ~~order to more closely align amounts paid to these executives with total company results~~the case of Messrs. Goodin and Schwartz.
We define total realized pay as the sum of:
•
base salary

•
~~increased Mr. Wells’~~ annual incentive ~~target from 100%~~award paid with respect to ~~125% of base salary to mitigate~~ the ~~impact of the added company earnings per share goal and to reflect his impact on overall company results~~year

•
~~continued to link our corporate executives’ – i.e., Messrs. Hildestad, Schwartz, and Schneider – 2012 annual~~the value realized upon the vesting of long-term incentive awards ~~to the achievement~~ of ~~our business segments’ performance goals~~
•
~~did not approve payment of any~~ performance shares ~~or dividend equivalents granted in 2009 for~~during the ~~2009-2011 performance period due to our total stockholder return for the 2009-2011 performance period placing us in the 25th percentile compared to our performance graph peer group~~year and

•
~~granted no increases under our Supplemental Income Security Plan, which is a nonqualified retirement plan that provides benefits to our key managers and four of our named executive officers.~~all other compensation as reported in the Summary Compensation Table.
The following table compares total realized pay for our named executives in 2013 to the total compensation as presented in the Summary Compensation Table. This table is not intended to be a substitute for the Summary Compensation Table.

Named Executive Officer

Base Salary
($)

Annual
Incentive
Awards
Paid
($)

Value
Realized
upon
Vesting of
Performance
Shares
($) (1)

All
Other
Compensation
($)

Total
Realized
Pay
($)

Total
Compensation
from the
Summary
Compensation
Table
($)

David L. Goodin

625,000

1,610,625

0

37,517

2,273,142

4,047,413

Doran N. Schwartz

345,000

296,355

0

34,881

676,236

1,047,274

J. Kent Wells

570,000

1,425,000

N/A

20,556

2,015,556

3,524,975

Jeffrey S. Thiede

367,068

825,000

N/A

66,282

1,258,350

1,258,350

Paul K. Sandness

344,000

354,595

0

39,131

737,726

1,124,864

(1)
Performance shares and dividend equivalents granted for the 2010-2012 performance period did not vest and were forfeited because performance was below threshold.

With respect to our chief executive officer, the following table demonstrates our pay for performance approach by comparing:

~~In addition, our Section 16 officers who had change~~•
total realized pay, which is the sum of ~~control employment agreements agreed to~~base salary, annual incentive awards paid, all other compensation, and the ~~early termination of their agreements, effective November 1, 2012.~~value realized upon the

~~Objectives~~
○
vesting of ~~our Compensation Program~~restricted stock during 2010
We structure our compensation program to help retain and reward the executive officers who we believe are critical to our long-term success. We have a written executive compensation policy for our Section 16 officers, including all our named executive officers. Our policy’s stated objectives are to:
○
vesting of performance shares during 2009 and 2010 (none vested during 2011, 2012, or 2013)
•
total compensation as reported in the Summary Compensation Table and
•
one-year total stockholder returns for 2009 through 2013.
For years 2009 through 2012, the compensation information is for Mr. Hildestad, our chief executive officer for those years, and for 2013, the compensation information is for Mr. Goodin. This table is not intended to be a substitute for the Summary Compensation Table.
14
MDU Resources Group, Inc. Proxy Statement

Proxy Statement

5 Year CEO Compensation and Total Stockholder Return
The compensation committee believes its approach to structuring the chief executive officers’ compensation is effective; as displayed in the above chart, the yearly changes in total compensation from the Summary Compensation Table and total realized pay align very closely with the yearly changes in total stockholder return.
Process for Determination of 2013 Compensation
Objectives of our Compensation Program
We structure our compensation program to help retain and reward the executive officers who we believe are critical to our long-term success. We have a written executive compensation policy for our Section 16 officers, including all our named executive officers. Our policy’s stated objectives are to:

•
recruit, motivate, reward, and retain high performing executive talent required to create superior long-term total stockholder return in comparison to our peer group

•
reward executives for short-term performance, as well as the growth in enterprise value over the long-term

•
provide a competitive package relative to industry-specific and general industry comparisons and internal equity, as appropriate

•
ensure effective utilization and development of talent by working in concert with other management processes – for example, performance appraisal, succession planning, and management development and

•
help ensure that compensation programs do not encourage or reward excessive or imprudent risk taking.

Role of Compensation Consultants
For 2013, we continued our approach of referencing market data to establish competitive pay levels for base salary, total annual cash, which is base salary plus target annual incentive, and total direct compensation, which is the sum of total annual cash plus the expected value of target long-term incentives.
Our executive compensation policy provides for an assessment of the competitive pay levels for base salary and incentive compensation for each Section 16 officer position to be conducted at least every two years by an independent consulting firm. For 2013 compensation, the compensation committee retained Towers Watson, a nationally recognized consulting firm, to perform this assessment and to assist the compensation committee in establishing competitive compensation targets for our Section 16 officers.

~~Elements of our Compensation Program~~
~~We pay/grant:~~
•
base salaries in order to provide executive officers with sufficient, regularly-paid income and attract, recruit, and retain executives with the knowledge, skills, and abilities necessary to successfully execute their job duties and responsibilities
•
~~opportunities to earn annual incentive compensation in order to be competitive from a total remuneration standpoint and ensure focus on annual financial and operating results and~~
•
~~opportunities to earn long-term incentive compensation in order to be competitive from a total remuneration standpoint and ensure focus on stockholder return.~~
If earned, incentive compensation, which consists of annual cash incentive awards and three-year performance share awards under our Long-Term Performance-Based Incentive Plan, makes up the greatest portion of our named executive officers’ total compensation. The compensation committee believes incentive compensation that comprised approximately 55.6% to 76.5% of total target compensation for the named executive officers is appropriate because:
•
~~our named executive officers are in positions to drive, and therefore bear high levels of responsibility for, our corporate performance~~
•
~~incentive compensation is more variable than base salary and dependent upon our performance~~
•
~~variable compensation helps ensure focus on the goals that are aligned with our overall strategy and~~
•
the interests of our named executive officers will be aligned with those of our stockholders by making a majority of the named executive officers’ target compensation contingent upon results that are beneficial to stockholders.

16
MDU Resources Group, Inc. Proxy Statement
15

Proxy Statement

~~The following table shows the allocation of total target compensation for~~In an engagement letter dated March 23, 2012, ~~among the individual components of base salary, annual incentive, and long-term incentive:~~

Name % of Total
Target
Compensation
Allocated to
Base Salary (%) % of Total Target Compensation
Allocated to Incentives

Annual (%) Long-Term (%) Annual +
Long-Term(%)
Terry D. Hildestad 28.6 28.6 42.8 71.4
Doran N. Schwartz 44.4 22.2 33.4 55.6
Steven L. Bietz 39.2 25.5 35.3 60.8
J. Kent Wells 23.5 29.4 47.1 76.5
William E. Schneider 39.2 25.5 35.3 60.8
~~In order to reward long-term growth,~~ the compensation committee ~~generally allocates a higher percentage of total target~~asked Towers Watson to prepare separate executive compensation toreviews for the ~~long-term incentive than to~~Section 16 officers and for the ~~short-term incentive~~chief executive officer. In its review for ~~our higher level executives, since they are in a better position to influence our long-term performance. Additionally,~~ the long-term incentive, if earned, is paid in company common stock. These awards, combined with our stock retention requirements and stock ownership policy, promote ownership of our stock by the named executive officers. The compensation committee believes that, as stockholders, the named executiveSection 16 officers, ~~will be motivated to consistently deliver financial results that build wealth for all stockholders over the long-term.~~Towers Watson was asked to:
~~Role of Management~~
Our executive compensation policy calls for an assessment of the competitive pay levels for base salary and incentive compensation for each Section 16 officer position to be conducted at least every two years by an independent consulting firm. Towers Watson conducted the study in 2010 for use by the compensation committee to determine 2011 compensation levels. In 2011, the compensation committee requested the competitive assessment be completed internally. They directed the vice president-human resources and the human resources department to prepare the competitive assessment in August 2011 on Section 16 officers for their use in establishing 2012 compensation.
The assessment included identifying any material changes to the positions analyzed, updating competitive compensation information, gathering and analyzing relevant general and industry-specific survey data, and updating the base salary structure. The human resources department assessed competitive pay levels for base salary, total annual cash, which is base salary plus target annual incentives, and total direct compensation, which is the sum of total annual cash and the expected value of target long-term incentives. The competitive assessment compared our positions to like positions contained in general industry compensation surveys and industry-specific compensation surveys. The human resources department aged the survey data from the date of the survey by 2.5% annualized to estimate the 2012 competitive targets.
~~The compensation surveys are listed on the following table:~~

Survey*

Number of
Companies
Participating
(#)

Median
Number of
Employees
(#)(1)

Number of
Publicly-
Traded
Companies
(#)

Median
Revenue
(000s)
($)

Towers Watson 2010 General Industry Executive Database

430

16,400

312

5,112,000

Towers Watson 2010 U.S. CDB Energy Services Executive Database

102

3,012

67

2,818,000

2010 Effective Compensation, Inc. Oil & Gas Exploration Compensation Survey

121

439

48

Not Reported

Mercer’s 2010 Total Compensation Survey for the Energy Sector

297

Not Reported

201

823,000

Towers Watson 2010/2011 Report on Top Management Compensation

3,422

—
(2)

—
(2)

—
(2)

•
match the Section 16 officer positions to survey data to generate 2013 market estimates for base salaries and short-term and long-term incentives
~~(1)~~
~~For the 2010 Effective Compensation, Inc. Oil & Gas Exploration Compensation Survey, the number reported as the Median Number of Employees is the average number of employees.~~
~~(2)~~•
~~The 3,422 organizations participating~~address general trends in ~~Towers Watson’s 2010/2011 Top Management Compensation Survey included 394 organizations~~executive compensation
•
compare base salaries and target short-term and long-term incentives, by position, to market estimates and recommend salary grade changes as appropriate
•
construct a recommended 2013 salary grade structure and
•
verify the competitiveness of target short-term and long-term incentives associated with ~~2,000 to 4,999 employees; 308 organizations with 5,000 to 9,999 employees; 205 organizations with 10,000 to 19,999 employees;~~salary grades and ~~87 organizations with 20,000 or more employees. Towers Watson did not provide a revenue breakdown or~~recommend modifications as appropriate.
In the chief executive officer review, Towers Watson was asked to use survey data and data from the company’s performance graph peer group to:
•
develop competitive estimates for base salary and target short-term and long-term incentives
•
recommend changes in base salary and target incentives based on the ~~number of publicly-traded companies participating~~competitive data and
•
address general trends in ~~its survey.~~chief executive officer compensation.
The compensation surveys and databases used by Towers Watson were:

Survey*

Number of
Companies
Participating
(#)

Median
Number of
Employees
(#)

Number of
Publicly-
Traded
Companies
(#)

Median
Revenue
(000s)
($)

Towers Watson 2011 CDB General Industry Executive Database

411

18,300

345

5,823,000

Towers Watson 2011 CDB Energy Services Executive Database

108

2,800

75

2,490,000

Mercer 2011 Total Compensation Survey for the Energy Sector

290

Not Reported

233

928,000

Towers Watson 2011 CSR Report on Top Management Compensation

1,574

4,800

630

1,513,000

*
The information in the table is based solely upon information provided by the publishers of the surveys and is not deemed filed or a part of this ~~compensation discussion~~Compensation Discussion and ~~analysis~~Analysis for certification purposes. For a list of companies that participated in the compensation surveys and databases, see Exhibit A.
In billions of dollars, our revenues for ~~2010,~~ 2011, 2012, and ~~2012~~2013 were approximately ~~$3.9,~~ $4.0, $4.1, and ~~$4.1,~~$4.5, respectively. Towers Watson aged the data from the date of the surveys by 3% on an annualized basis to estimate 2013 competitive targets.
After its February 2013 meeting, the compensation committee authorized the company to engage Towers Watson to provide competitive practice information with respect to the treatment by other exploration and production companies of ceiling test impairments for annual incentive purposes. Towers Watson analyzed the following fifteen companies with an earnings-based measure impacted by impairment charges:
•
Anadarko Petroleum Corporation
•
Eagle Rock Energy Partners, L.P.
•
PVR Partners L.P.
•
Apache Corporation
•
Encana Corporation
•
Quicksilver Resources Inc.
•
Atmos Energy Corporation
•
Goodrich Petroleum Corporation
•
SM Energy Company
•
Black Hills Corporation
•
Niska Gas Storage Partners LLC
•
Ultra Petroleum Corp.
•
Chesapeake Energy Corporation
•
PDC Energy, Inc.
•
WPX Energy, Inc.

Role of Management
The chief executive officers during 2012 and 2013 played an important role in recommending 2013 compensation to the committee for the other named executive officers. Mr. Hildestad recommended 2013 compensation for Messrs. Schwartz, Wells, and Sandness after assessing their performance during 2012. Mr. Hildestad did not make any recommendations with respect to Mr. Goodin’s compensation for 2013. In connection with Mr. Thiede’s promotion, Mr. Goodin recommended his compensation for the remainder of 2013. The chief executive officers considered the relative value of the named executive officers’ positions and their salary grade classifications. They reviewed the competitive assessment prepared by Towers Watson to formulate 2013 compensation recommendations for the compensation committee. The chief executive officers attended compensation committee meetings, but were not present during discussions regarding their own compensation.

16
MDU Resources Group, Inc.Proxy Statement
17

Proxy Statement

~~The human resources department also augmented the competitive analysis by using Equilar to provide information on what was reported by companies in~~Our performance assessment program rates performance of our performance graph peer group and by other public companies in relevant industries, as selected by the human resources department and as determined by SIC codes and as disclosed in their SEC filings. The companies referenced via Equilar and the positionsexecutive officers, except for ~~which they were used are found in Exhibit B.~~
~~For~~ our ~~president and~~ chief executive officer, ~~the Equilar companies included all companies in our performance graph peer group and data on 68 additional chief executive officers from public companies~~ in the ~~energy, construction, and utility industries~~following areas, which help determine actual salaries within the range of salaries associated with ~~revenues ranging from $1 billion to $8 billion.~~
~~For our vice president and chief financial officer,~~ the Equilar companies included all companies in our performance graph peer group and data on 55 additional chief financial officers from public companies in the energy, construction, and utility industries with revenues ranging from $1 billion to $8 billion.
For the president and chief executive officer of our exploration and production segment, the Equilar companies included the exploration and production companies in our performance graph peer group and data on 27 additional chief executive officers from public companies in the oil and gas exploration and production industries with revenues ranging from $250 million to $850 million.
For the president and chief executive officer of the pipeline and energy services segment, the Equilar companies included the pipeline and energy services companies in our performance graph peer group and data on 13 chief executive officers from public companies in the pipeline and energy services industry with revenues of $1 billion or less.
The chief executive officer played an important role in recommending 2012 compensation to the committee for the other named executive officers. The chief executive officer assessed the performance of the named executive officers and considered the relative value of the named executive officers’ positions and theirexecutive’s salary grade classifications. He then reviewed the competitive assessment prepared by the human resources department to formulate 2012 compensation recommendations for the compensation committee, other than for himself. The chief executive officer attended compensation committee meetings; however, he was not present during discussions regarding his compensation.grade:

~~Timing of Compensation Decisions for 2012~~•
leadership
•
mentoring
~~The compensation committee, in conjunction~~•
leading with the board of directors, determined all compensation for each named executive officer for 2012 and set overall and individual compensation targets for the three components of compensation – base salary, annual incentive, and long-term incentive. The compensation committee made recommendations to the board of directors regarding compensation of all Section 16 officers, and the board of directors then approved the recommendations.integrity
•
financial responsibility
•
achievement focus
•
safety
•
risk management
An executive’s overall performance in our performance assessment program is rated on a scale of one to five, with five as the highest rating denoting distinguished performance. An overall performance above 3.75 is considered commendable performance.
Timing of Compensation Decisions for 2013
The compensation committee, in conjunction with the board of directors, determined all compensation for each named executive officer for 2013. The compensation committee made recommendations to the board of directors regarding compensation of all Section 16 officers, and the board of directors then approved the recommendations.
The compensation committee reviewed the competitive assessment and established ~~2012~~2013 salary grades at its August ~~2011 meeting.~~2012 and November 2012 meetings. At the November ~~2011~~2012 meeting, it established individual base salaries, target annual incentive award levels, and target long-term incentive award levels for ~~2012.~~2013, except for Mr. Thiede, whose base salary and target annual incentive award were approved at the May 2013 meeting. At ~~their~~the February and March ~~2012~~2013 meetings, the compensation committee and the board of directors ~~increased the target annual incentive award level for Mr. Wells and~~ determined 2013 annual and long-term incentive awards, along with ~~the payouts~~payments based on performance ~~from~~for the ~~recently completed~~2012 annual incentive awards and no payments for the 2010-2012 performance ~~period for prior annual and long-term~~share awards. The February and March ~~2012~~ meetings occurred after the release of earnings for the prior year.
~~Stockholder Advisory Vote (“Say on Pay”)~~
Our stockholders had their second advisory vote on our named executive officers’ compensation at the 2012 Annual Meeting of Stockholders. Approximately 92% of the shares present in person or represented by proxy and entitled to vote on the matter approved the named executive officers’ compensation. The 92% approval is consistent with the results of our say on pay vote at the 2011 Annual Meeting. The compensation committee and the board of directors considered the results of the votes at their November 2011 and November 2012 meetings and did not change our executive compensation program as a result of the votes.
~~Salary Grades for 2012~~
~~The compensation committee determines the named executive officers’ base salaries and annual and long-term incentive targets~~
Stockholder Advisory Vote (“Say on Pay”)
Our stockholders had their third advisory vote on our named executive officers’ compensation at the 2013 Annual Meeting of Stockholders. Approximately 96% of the shares present in person or represented by proxy and entitled to vote on the matter approved the named executive officers’ compensation. The 96% approval is slightly higher than the results of our say on pay vote at the 2012 Annual Meeting, which was 92%. The compensation committee and the board of directors considered the results of the votes at their November 2012, May 2013, and November 2013 meetings and did not change our executive compensation program as a result of the votes.

Salary Grades for 2013
The compensation committee determines the named executive officers’ base salaries and target annual and long-term incentives by reference to salary grades. Each salary grade has a minimum, midpoint, and maximum annual salary level with the midpoint targeted at approximately the 50th percentile of the competitive assessment data for positions in the salary grade. The compensation committee may adjust the salary grades away from the 50th percentile in order to balance the external market data with internal equity. The salary grades also have target annual and long-term incentive levels, which are expressed as a percentage of the individual’s actual base salary. We generally place named executive officers into a salary grade based on historical classification of their positions; however, the compensation committee reviews each classification and may place a position into a different salary grade if it determines that the targeted competitive assessment data for positions in the salary grade. The compensation committee may adjust the salary grades away from the 50th percentile in order to balance the external market data with internal equity. The salary grades also have annual and long-term incentive target levels, which are expressed as a percentage of the individual’s actual base salary. We generally place named executive officers into a salary grade based on historical classification of their positions; however, the compensation committee reviews each classification and may place a position into a different salary grade if it determines that the targeted competitive

18
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~
compensation for the position changes significantly or the executive’s responsibilities and/or performance warrants a different salary grade. Individual executives may be paid below, equal to, or above the salary grade midpoint. Mr. Wells’ 2011 compensation was determined pursuant to his letter agreement in connection with his hiring effective May 2, 2011, and served as a basis for his 2012 compensation, rather than the business segment leaders’ salary grade.
The salary grades give the compensation committee flexibility to assign different salaries to individual executives within a salary grade to reflect one or more of the following:

•
executive’s performance on financial goals and on non-financial goals, including the results of the performance assessment program

•
executive’s experience, tenure, and future potential

•
position’s relative value compared to other positions within the company

•
relationship of the salary to the competitive salary market value

•
internal equity with other executives and

•
economic environment of the corporation or executive’s business segment.

MDU Resources Group, Inc.Proxy Statement
17

~~No changes were made in the salary grade classifications of the named executive officers for 2012, and after reviewing the competitive analysis, the compensation~~

Proxy Statement

The committee ~~made no changes in~~increased the base salary ~~ranges~~midpoints for 2013 in salary grades A through I by a total of 2.8%, since the midpoints had not been increased in three years and the competitive assessment indicated that target total annual compensation and total direct compensation were below the market median at the 50th percentile. The midpoint of salary grade I, which is Messrs. Schwartz’s and Sandness’ salary grade, was increased by 3.1% from $325,000 to $335,000.
The committee established a new salary grade L for 2013 for our president and chief executive officer position, which was formerly in salary grade K. Based on the competitive assessment, the committee established the midpoint of salary grade L at $763,000.
The committee assigned the vice chairman and president and chief executive officer of Fidelity Exploration & Production Company to salary grade K in recognition of the greater responsibility that Mr. Wells would assume as vice chairman. The midpoint of salary grade K was established at $500,000 to accommodate the higher market compensation data associated with ~~each named executive officer’s~~his responsibilities.
In connection with his promotion, Mr. Thiede was moved from salary grade ~~classification.~~H to salary grade J, with a midpoint of $390,000, which has been the midpoint for that salary grade for a number of years.
The committee did not change the target incentive compensation guidelines for the salary grades, except that Mr. Sandness’ target annual and long-term incentives were increased to 60% and 85% of base salary, respectively, to place his target total annual compensation and total direct compensation closer to the market median.
Our named executive officers’ salary grade classifications for ~~2012~~2013 are listed below, along with the base salary ranges associated with each classification:

2012 Base Salary (000s)

2013 Salary Grade Base Salary (000s)

Position

Grade

Name

Minimum
($)

Midpoint
($)

Maximum
($)

Grade

Name

Minimum
($)

Midpoint
($)

Maximum
($)

President and CEO

K

Terry D. Hildestad

620

775

930

L

David L. Goodin

610

763

916

Vice President and CFO

I

Doran N. Schwartz

260

325

390

I

Doran N. Schwartz

268

335

402

President and CEO, WBI Holdings, Inc.

J

Steven L. Bietz

312

390

468
President and CEO, Fidelity Exploration & Production Company

J

J. Kent Wells

312

390

468
Executive Vice President – Bakken Development

J

William E. Schneider

312

390

468
Vice Chairman and President and CEO, Fidelity Exploration & Production Company

K

J. Kent Wells

400

500

600

President and CEO, Construction Services Group

J

Jeffrey S. Thiede

312

390

468

General Counsel and Secretary

I

Paul K. Sandness

268

335

402

Allocation of Total Target Compensation for 2013
Incentive compensation, which consists of annual cash incentive awards and three-year performance share awards under our Long-Term Performance-Based Incentive Plan, comprises a significant portion of our named executive officers’ total target compensation because:

~~Performance Assessment Program~~
~~Our~~•
our named executive officers are in positions to drive, and therefore bear high levels of responsibility for, our corporate performance ~~assessment program rates~~
•
incentive compensation is more variable than base salary and dependent upon our performance
•
variable compensation helps ensure focus on the goals that are aligned with our overall strategy and
•
the interests of our named executive officers ~~except~~will be aligned with those of our stockholders by making a significant portion of their target compensation contingent upon results that are beneficial to stockholders.
The following table shows the allocation of total target compensation for 2013 among the individual components of base salary, annual incentive, and long-term incentive:

% of Total
Target
Compensation
Allocated to
Base Salary (%)

% of Total Target Compensation
Allocated to Incentives
Name

Annual (%)

Long-Term (%)

Annual +
Long-Term (%)

David L. Goodin

25.0

37.5

37.5

75.0

Doran N. Schwartz

44.4

22.2

33.4

55.6

J. Kent Wells

23.5

29.4

47.1

76.5

Jeffrey S. Thiede (1)

52.6

47.4

—

47.4

Paul K. Sandness

40.8

24.5

34.7

59.2

(1)
Mr. Thiede’s percentages were calculated using a base salary that was prorated for ~~our chief executive officer,~~2013 as follows: one-third at an annualized rate of $330,000 and two-thirds at an annualized rate of $385,000. Mr. Thiede was not a participant in the ~~following areas, which help determine actual salaries within the range of salaries associated with the executive’s salary grade:~~Long-Term Performance-Based Incentive Plan in 2013.

•
~~visionary leadership~~
•
~~leadership~~
•
~~strategic thinking~~
•
~~mentoring~~
•
~~leading with integrity~~
•
~~relationship building~~
•
~~managing customer focus~~
•
~~conflict resolution~~
•
~~financial responsibility~~
•
~~organizational savvy~~
•
~~achievement focus~~
•
~~safety~~
•
~~judgment~~
•
~~risk management~~
•
~~planning and organization~~
An executive’s overall performance in our performance assessment program is rated on a scale of one to five, with five as the highest rating denoting distinguished performance. An overall performance above 3.75 is considered commendable performance.
The chief executive officer assessed each other named executive officer’s performance under the performance assessment program, and the compensation committee, as well as the full board of directors, assessed the chief executive officer’s performance.

18
MDU Resources Group, Inc.Proxy Statement
19

Proxy Statement

In order to reward long-term growth, the compensation committee generally allocates a higher percentage of total target compensation to the long-term incentive than to the short-term incentive for our higher level executives, since they are in a better position to influence our long-term performance. As discussed later, Mr. Goodin’s long-term incentive percentage was kept at a lower level to balance his higher Supplemental Income Security Plan benefit. Additionally, the long-term incentive, if earned, is paid in company common stock. These awards, combined with our stock retention requirements and stock ownership policy, discussed later, promote ownership of our stock by the named executive officers. The ~~board~~compensation committee believes that, as stockholders, the named executive officers will be motivated to consistently deliver financial results that build wealth for all stockholders over the long-term.
PEER Analysis: Comparison of ~~directors rates~~Pay for Performance Ratios
Each year we compare our ~~chief~~named executive ~~officer’s~~officers’ pay for performance ratios to the pay for performance ratios of the named executive officers in the ~~following areas:~~
•
~~leadership~~
•
~~succession planning~~
•
~~integrity and values~~
•
~~human resources~~
•
~~strategic planning~~
•
~~external relations~~
•
~~financial results~~
•
~~board relations~~
•
~~communications~~
•
~~risk management~~
performance graph peer group. This analysis compares the relationship between our compensation levels and our average annual total stockholder return to the peer group over a five-year period. All data used in the analysis, including the valuation of long-term incentives and calculation of stockholder return, were compiled by Equilar, Inc., an independent service provider, which is based on each company’s annual filings for its data collection.
This analysis consisted of dividing what we paid our named executive officers for the years 2008 through 2012 by our average annual total stockholder return for the same five-year period to yield our pay ratio. Our ~~chief executive officer’s~~pay ratio was then compared to the pay ratio of the companies in the performance graph peer group, which was ~~rated on~~calculated by dividing total direct compensation for all the proxy group executives by the sum of each company’s average annual total stockholder return for the same five-year period.
For the five-year period of 2008 through 2012, our average annual stockholder return was (2.3)%. Therefore, our pay ratio was not a ~~scale~~meaningful statistic, and a comparison to the pay ratio of ~~one~~the companies in the performance graph peer group could not be made. The compensation committee believes that the analysis continues to ~~five, with five as~~serve a useful purpose in its annual review of compensation despite the ~~highest rating denoting performance well above expectations.~~effect of the negative stockholder return for the 2008 through 2012 period.
2013 Compensation for Our Named Executive Officers
Base Salaries, Total Annual Compensation, and Total Direct Compensation
David L. Goodin
In connection with Mr. Goodin’s promotion to president and chief executive officer of the ~~Named Executive Officers~~company effective January 4, 2013, the compensation committee moved Mr. Goodin from salary grade J to salary grade L, with a midpoint of $763,000, and recommended a base salary increase for ~~2012~~Mr. Goodin from $385,000 to $625,000. The committee noted that the $625,000 was below the median salary of $650,000 for the chief executive officers from the performance graph peer companies and below the median salary of $930,000 for the chief executive officers from the salary survey data, both as noted in the competitive assessment. The committee believed it was appropriate for Mr. Goodin’s 2013 base salary to be less than market and less than the 2013 midpoint due to his newness in the position. The committee also established Mr. Goodin’s target total annual cash compensation of $1,562,500, which was above the median total cash compensation of $1,335,000 paid to chief executive officers from the performance graph peer companies and below the median total cash compensation of $1,920,000 paid to chief executive officers from the salary survey data, both as noted in the competitive assessment. From a total direct compensation perspective, the committee established a target of $2,500,000, which was below the competitive reference points of $2,970,000 for the performance graph peer group and $4,685,000 for the salary survey companies.

Doran N. Schwartz
~~Terry D. Hildestad~~
The compensation committee recommended a 6.67% salary increase for Mr. Hildestad for 2012, which would have raised his salary from $750,000 to $800,000 ($775,000 being the market median). The compensation committee’s rationale for the increase was
For 2013, the compensation committee awarded Mr. Schwartz, our vice president and chief financial officer, a 15.0% increase, raising his salary from $300,000 to $345,000, or to 103% of the midpoint of salary grade I. Combined with his target annual and long-term incentive, this would result in target total annual compensation of 64% and total direct compensation of 57% of the 2013 competitive salary survey data at the 50th percentile. The compensation committee’s rationale for the increase was in recognition of his:

•
~~his high performance evaluation~~renewal and expansion of the company’s credit facility

•
~~his high integrity, excellent business know how, and ability to work effectively with~~continued growth in the ~~management team and the board~~treasury area

•
~~his effectiveness in navigating~~cultivation of excellent relationships with the ~~company through a difficult economic environment~~investment community and

•
~~his~~relatively low salary ~~had been frozen since January 1, 2009.~~
~~Mr. Hildestad, however, did not accept his base salary increase for 2012 in order~~compared to ~~be treated~~ the ~~same as other Section 16 officers who did not receive a salary increase for 2012.~~
~~Doran N. Schwartz~~
~~Mr. Schwartz was elected vice president and~~ chief financial ~~officer effective February 17, 2010. For 2012, the compensation committee awarded Mr. Schwartz a 9.9% increase, raising his 2012 salary from $273,000 to $300,000, or 92%~~officers of ~~the midpoint of salary grade I for 2012. The compensation committee’s rationale for the increase was in recognition of:~~performance graph peer companies.

•
his assistance in the company achieving a return on invested capital of 6.9% for the twelve months ending June 2011 as compared to the median return on invested capital of 6.0% for companies in our performance graph peer group over the same time period
•
~~his success at building good working relationships with shareholders, rating agencies, and the financial community and~~
•
~~moving his salary closer to the midpoint of salary grade I.~~

~~Steven L. Bietz~~
~~Mr. Bietz received no salary increase for 2012 because the compensation committee wanted to limit salary cost increases.~~
~~J. Kent Wells~~
~~Mr. Wells received no salary increase for 2012 because he had just started his employment with the company in May 2011 with a salary above the maximum for his salary grade.~~
~~William E. Schneider~~
~~Mr. Schneider received no salary increase for 2012 because his salary was 115% of the market value for his position and the compensation committee wanted to limit salary cost increases.~~

20
MDU Resources Group, Inc.Proxy Statement
19

Proxy Statement

J. Kent Wells
For 2013, the compensation committee awarded Mr. Wells, our vice chairman and president and chief executive officer of Fidelity Exploration & Production Company, a 3.6% increase, raising his salary from $550,000 to $570,000, or 114% of the midpoint of salary grade K. Combined with his target annual and long-term incentives, this would result in target total annual compensation of 118% and total direct compensation of 95% of the 2013 competitive salary survey data at the 50th percentile. The compensation committee’s rationale for the increase was in recognition of:

•
a 25% increase in production from 2011 to 2012
•
a shift in the production mix from 80% natural gas and 20% oil and liquids in 2011 to 60% natural gas and 40% oil and liquids in 2012 and
•
outstanding leadership at Fidelity Exploration & Production Company.

Jeffrey S. Thiede
Mr. Thiede was promoted to president and chief executive officer of MDU Construction Services Group, Inc. effective April 30, 2013. In connection with his promotion, the compensation committee moved Mr. Thiede from salary grade H to salary grade J with a midpoint of $390,000 and increased Mr. Thiede’s base salary from $330,000 to $385,000. Combined with his target annual incentive, his prorated target total annual compensation was $696,667. The committee’s rationale for the increase was recognizing Mr. Thiede’s assumption of the additional duties and responsibilities as chief executive officer, as well as recognizing the success he achieved as president of MDU Construction Services Group, Inc. since January 2012.

Paul K. Sandness
For 2013, the compensation committee awarded Mr. Sandness, our general counsel and secretary, a 3% increase, raising his salary from $334,000 to $344,000, or to 103% of the midpoint of salary grade I. Combined with his increased target annual and long-term incentives, this would result in target total annual compensation of 89% and total direct compensation of 86% of the 2013 competitive salary survey data at the 50th percentile. The compensation committee’s rationale for the increase was in recognition of Mr. Sandness’ successful management of company litigation and his leadership in the corporate governance area.

~~2012~~ Annual Incentives
What the Performance Measures Are and Why We Chose Them
The compensation committee develops and reviews financial and other corporate performance measures to help ensure that compensation to the executives reflects the success of their respective business segment and/or the corporation, as well as the value provided to our stockholders. ~~For all~~
The compensation committee believes earnings per share and return on invested capital are very good measurements in assessing a business ~~segment chief executive officers, including Messrs. Wel~~lssegment’s performance and ~~Bietz,~~ the company’s performance ~~measures for annual incentive awards are~~from a financial perspective, because:

•
~~their respective business segment’s annual return on invested capital results compared to target~~
•
~~their respective business segment’s allocated~~ earnings per share ~~results compared to target~~is a generally accepted accounting principle measurement and is a key driver of stockholder return over the long-term and

•
~~the company’s consolidated earnings per share compared to~~return on invested capital measures how efficiently and effectively management deploys capital, where sustained returns on invested capital in excess of a ~~target~~business segment’s cost of ~~$1.19.~~capital create value for our stockholders.
~~The compensation committee added the third performance measure, consolidated earnings per share, for~~For the first time in ~~2012. The~~2013, the compensation committee ~~weighted~~selected earnings as the ~~2012~~ performance ~~measures~~measure for ~~Messrs. Wells and Bietz at 75% for their~~two business segments. For the construction services segment, key earnings levels were selected in order to balance conservative financial planning as well as earnings volatility, instead of tying performance ~~measures (weighted evenly) and 25% for the company’s~~to allocated earnings per share ~~measure to more closely tie their~~and budgeted return on invested capital.
To provide the compensation committee with a competitive practice reference point in terms of how other exploration and production companies treat ceiling test impairments for annual incentive ~~amounts~~purposes, we engaged Towers Watson to ~~total company results.~~prepare the analysis discussed in the Role of Compensation Consultants section above. The committee considered Towers Watson’s report and selected earnings, as adjusted, for the exploration and production segment to motivate the chief executive officer to increase and maintain production at a high level and develop the appropriate mix of production and replacement reserves, without regard to the effect on earnings of non-cash impairments and hedge accounting, the pricing components over which he had no control.
20
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
For the named executive officers working at MDU Resources Group, Inc. ~~in 2012,~~, who were Messrs. ~~Hildestad,~~Goodin, Schwartz, and ~~Schneider,~~Sandness, the compensation committee ~~based 2012~~continued to base annual incentives on the achievement of performance goals at the business segments: (i) the construction materials and contracting and construction services segments, taken together, (ii) the pipeline and energy services segment, (iii) the exploration and production segment, and (iv) the electric and natural gas distribution segments. The compensation committee’s rationale for this approach was to provide greater alignment between the MDU Resources Group, Inc. executives and business segment performance.
As established by the compensation committee in March 2013, the annual performance measures and goal weightings for the business segment leaders were:

Business Segment
Goal Weighting

Company
Goal Weighting

Position

Business Segment

Budgeted
Allocated EPS
(%)

Budgeted
ROIC
(%)

Budgeted
Earnings
(%)

EPS
(%) (1)

Chief Executive Officer

Construction Materials & Contracting
Construction Services

18.75
—

18.75
—

—
37.5
(2)

25.0

President and Chief Executive Officer

Pipeline and Energy Services

37.5

37.5

—

25.0

President and Chief Executive Officer

Electric and Natural Gas Distribution

37.5

37.5

—

25.0

President and Chief Executive Officer

Exploration and Production

—

—

75.0
(3)

25.0

(1)
Earnings per share for purposes of the annual incentive calculation reflect the adjustments referred to in footnote 3.
(2)
Earnings were defined as GAAP earnings.
(3)
Earnings were defined as GAAP earnings reported for the exploration and production segment, adjusted to exclude the (i) effect on earnings of any noncash write-downs of oil and natural gas properties due to ceiling test impairment charges and any associated earnings benefit resulting from lower depletion, depreciation and amortization expenses and (ii) the effect on earnings of any noncash gains and losses that result from (x) ineffectiveness in hedge accounting, (y) derivatives that no longer qualify for hedge accounting treatment, or (z) the discontinuation of hedge accounting treatment.
After the chief executive officer of our two construction segments retired in late April 2013 and Messrs. Thiede and Barney were promoted, the compensation committee left Mr. Thiede’s annual incentive performance measure unchanged from what it had been earlier in the year, namely the construction services business segment’s GAAP earnings. This determination had no effect on the calculation of the annual incentive awards for the executive officers at MDU Resources Group, Inc., as discussed above, which were to be calculated as if the former chief executive officer of the construction business segments had remained employed through the end of 2013.
Except for our construction services business segment, we establish our incentive plan performance targets in connection with our annual financial planning process, where we assess the economic environment, competitive outlook, industry trends, and company specific conditions to set projections of results. The compensation committee ~~believes earnings per share~~evaluates the projected results and ~~return on invested capital are very good measurements in assessing a business segment’s~~uses this evaluation to establish the incentive plan performance ~~and~~targets based upon recommendation of the company’s performance from a financial perspective. Earnings per share is a generally accepted accounting principle measurement and is a key driver of stockholder return over the long-term. Return on invested capital measure show efficiently and effectively management deploys capital. Sustained returns on invested capital in excess of a business segment’s cost of capital create value for our stockholders.
chief executive officer. Allocated earnings per share for a business segment is calculated by dividing that business segment’s earnings by the business segment’s portion of the total company weighted average shares outstanding. Return on invested capital for a business segment is calculated by dividing the business segment’s earnings, without regard to after tax interest expense and preferred stock dividends, by the business segment’s average capitalization for the calendar year.
~~We establish our incentive plan performance targets in connection with our annual financial planning process, where we assess~~ If the ~~economic environment, competitive outlook, industry trends, and company specific conditions to set projections of results. The~~ compensation committee ~~evaluates the projected results and uses this evaluation to establish the incentive plan performance targets based upon recommendation of the chief executive officer. In determining where to set the~~utilizes a return on invested capital target ~~the compensation committee~~for a business segment, it considers the business segment’s weighted average cost of capital. The weighted average cost of capital is a composite cost of the individual sources of funds including equity and debt used to finance a company’s assets. It is calculated by averaging the cost of debt plus the cost of equity by the proportion each represents in our, or the business segment’s, capital structure. ~~For 2012,~~
In the ~~compensation committee chose to use the return on invested capital target for each~~case of our construction services business segment, ~~as approved by the board in the 2012 business plan, except for the construction services segment, which had a target higher than the 2012 business plan~~we utilized key earnings levels to incentivize efforts for that segment to achieve its weighted average cost of capital within five years. The compensation committee imposed an additional requirement for the 2012 return on invested capital portion of the annual incentives for the construction materials and contracting segment, the construction services segment, and the exploration and production segment. The additional requirement was the business segment needed to achieve its weighted average cost of capital in order to achieve 200% of the annual incentive target attributable to the return on invested capital portion ofstructure the annual incentive. ~~However, payments with respect to 2012 return on invested capital results above the 2012 target but below the weighted average cost of capital would be interpolated,~~The specific earnings levels and their associated incentive payment amounts are addressed in order to motivate these executives to achieve performance levels between the return on invested capital performance targets and the weighted average cost of capital for their respective business segments.Construction Services Segment Earnings Goal section below.
~~MDU Resources Group, Inc.~~~~Proxy Statement~~
21

~~Proxy Statement~~
Our Named Executive Officers’ ~~2012~~Target Annual Incentive ~~Targets and Why We Chose Them~~Compensation
~~Targets~~
The compensation committee established the named executive officers’ target annual incentive ~~targets~~ as a percentage of each officer’s actual ~~2012~~2013 base salary.
Messrs. ~~Hildestad’s, Schwartz‘s,~~Goodin’s, Schwartz’s, and ~~Schneider’s 2012~~Sandness’ 2013 target annual incentives were ~~100%~~150%, 50%, and ~~65%~~60% of base salary, ~~respectively. The compensation committee determined the 2012 annual incentive targets would remain unchanged from 2011 for these named executives~~respectively, based on the ~~following reasons:~~following:

•
~~For~~In connection with his promotion, Mr. ~~Hildestad, the~~Goodin’s target annual incentive ~~target of 100%~~was set at 150% of base salary, or $937,500, which was ~~slightly~~ above the ~~86%~~107% and 103% of base salary paid to chief executive officer positions based on salary survey data and performance graph peer group data, respectively, from the competitive assessment. The committee’s rationale for assigning an above-market target annual incentive percentage was to offset a below-market target long-term incentive and to ensure, from an internal equity standpoint, that Mr. Goodin’s target incentive was above the target incentives of his direct reports.
MDU Resources Group, Inc. Proxy Statement
21

Proxy Statement

•
For Mr. Schwartz, the target annual incentive of 50% of base salary was below the 71% and 58% of base salary paid to chief financial officers based on salary survey data and performance graph peer group data, respectively, from the competitive assessment. Since prior years had shown little difference between Mr. Schwartz’s target incentive and the targets from the competitive assessments, the committee ~~believed this difference was too small~~decided to ~~warrant a change in Mr. Hildestad’s 2012 incentive~~forego changing his target.

•
For Mr. ~~Schwartz,~~Sandness, the target annual incentive ~~target of~~was increased from 50% to 60% of base salary ~~was slightly below 57%~~to be approximately equal to the 59% of base salary paid to ~~chief financial officers~~top legal executives based on salary survey data from the competitive assessment. ~~The committee believed this difference was too small to warrant a change in Mr. Schwartz’s 2012 incentive target.~~
•
For Mr. Schneider, the compensation committee determined his 2012 incentive target should remain the same from 2011 because of the importance the company placed on his new role of leveraging opportunities in the Bakken that would cut across all of the company’s business segments. There was no competitive data compiled on his position.
Mr. ~~Bietz’s 2012~~Wells’ 2013 target ~~annual~~ incentive was ~~65%~~unchanged at 125% of base ~~salary.~~salary, which was above the 57% of base salary paid to comparable positions in the survey data and below the average of 234% of base salary paid at exploration and production companies (Berry Petroleum Company, EQT Corporation, and Whiting Petroleum Corporation) in our performance graph peer group from the competitive assessment. The compensation committee determined, as it had last year, that the ~~2012 annual~~target incentive ~~target would remain unchanged from 2011 for Mr. Bietz because the annual incentive based on salary survey data from the competitive assessment was 62%~~of 125% of base ~~salary. The committee believed this difference~~salary was ~~too small to warrant a change in Mr. Bietz’s 2012 target annual incentive.~~
Mr. Wells’ 2012 incentive target was 125% of bases salary, which was increased from 100% of base salary. The committee raised Mr. Wells’ annual incentive target to mitigate the impact of the added company earnings per share goal and to reflect his business segment’s impact on overall company results. The committee recognizedappropriate given the significant investment ~~that his business~~in the exploration and production segment ~~will make~~ and the desire to incentivize and motivate Mr. Wells to generate earnings that can greatly impact overall company earnings.
~~Named Executive Officers’ 2012 Incentive Payments~~
~~Terry D. Hildestad, Doran N. Schwartz, and William E. Schneider~~
~~As discussed above, Messrs. Hildestad, Schwartz, and Schneider were awarded 2012 incentives~~Mr. Thiede’s 2013 target incentive was 90% of base salary, which remained unchanged from the target incentive he had before his promotion, but was to be calculated based on ~~achievement~~his prorated base salary. His position was not included in the competitive assessment prepared by Towers Watson. The committee believed maintaining the 2013 target incentive of 90% of base salary was appropriate because it would compensate Mr. Thiede for not having received any long-term performance ~~goals~~share grants.
MDU Resources Group, Inc. EPS Goal
The MDU Resources Group, Inc. earnings per share component represented 25% of the award opportunity for all business segment leaders except for Mr. Thiede. Payout could range from no payment if the results were below 85% of the $1.27 target to a 200% payout if the results were $1.46 or higher. The committee set the target at $1.27, which was above the 2012 target of $1.19 and above the adjusted 2012 results of $1.15, which eliminated the effect of $246.8 million after-tax noncash charges relating to the write-down of oil and natural gas properties in 2012, discontinued operations, and the net benefit related to natural gas gathering operations litigation. The 2013 target was established based on adjusted earnings at the exploration and production segment as described in footnote 3 to the table under What the Performance Measures Are and Why We Chose Them above. The higher 2013 earnings per share target level was based primarily on anticipated higher earnings at all business segments.
Earnings per share for 2013 were, on a GAAP basis, $1.47 and, on an adjusted basis, $1.49. The ~~award opportunities~~payment on this component was 200% of target.
Exploration and ~~results for~~Production Segment Earnings Goal
For the ~~business segments are discussed below.~~
~~As a result~~exploration and production segment, 75% of the performance goals achieved at the business segments, Messrs. Hildestad, Schwartz, and Schneider earned 69.1% of their target awards, resulting in a payment of $518,250 for Mr. Hildestad, $103,650 for Mr. Schwartz, and $200,950 for Mr. Schneider.
~~Pipeline and Energy Services Segment~~
~~For the pipeline and energy services segment, the 2012~~2013 award opportunity was ~~comprised~~based on earnings adjusted as described in footnote 3 to the table under What the Performance Measures Are and Why We Chose Them above. Payout could range from no payment if 2013 earnings were below the 90% level to a 200% payout if the segment’s 2013 earnings were at or above the 105% level.
The committee set the exploration and production segment’s 2013 earnings target level at $84 million, which was above the 2012 target level of ~~three components:~~$78.4 million and 20.7% above 2012 adjusted results, which excluded the noncash ceiling test impairments. The higher 2013 earnings target level was approved by the board in the 2013 business plan and also based on an anticipated increase in production and continued shifting of production to more oil and natural gas liquids and less natural gas.
The segment’s 2013 earnings were $98.4 million equating to a 200% payment on the segment earning’s component, which coupled with MDU Resources Group, Inc.’s earnings per share being 200% of target, resulted in a 2013 annual incentive payment for Mr. Wells of $1,425,000 or 200% of target.
Electric and Natural Gas Distribution Segments EPS and ROIC Goals
For the electric and natural gas distribution segments, 75% of the 2013 award opportunity was based on allocated earnings per share and budgeted return on invested capital, equally weighted. Payout could range from no payment if the allocated earnings per share and return on invested capital results were below the 85% level to a 200% payout if:

•
~~The pipeline and energy services segment component represented 75% of~~ the ~~target award, and payout could range from no payment if the results were below the 85% level to a 200% payout if:~~
o
~~the 2012~~2013 allocated earnings per share for the segment were at or above the 115% level and

o•
the ~~2012~~2013 return on invested capital was at or above the 115% level.

•
The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 to a 200% payout if the results were $1.37 or higher.

22
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
The committee set the 2013 target for allocated earnings per share higher than the 2012 target and higher than 2012 actual results to reflect anticipated growth in the western North Dakota region of the service territory. The committee set the 2013 return on invested capital target lower than the 2012 target level and higher than the 2012 actual results to reflect higher invested capital associated with its growth projects.
For 2013, the electric and natural gas distribution segments’ earnings per share and return on invested capital were 108.3% and 103.4% of their respective targets, equating to 155.5% and 122.6%, respectively, of the target amount attributable to those components, which coupled with MDU Resources Group, Inc.’s earnings per share being 200% of target, led to overall results for these segments of 154.3% of the 2013 target annual incentive award.
Pipeline and Energy Services Segment EPS, ROIC, and Safety Goals
For the pipeline and energy services segment, 75% of the 2013 award opportunity was based on allocated earnings per share and budgeted return on invested capital, equally weighted. Payout could range from no payment if the results were below the 85% level to a 200% payout if:

•
the 2013 allocated earnings per share for the segment were at or above the 115% level and
•
the 2013 return on invested capital was at or above the 115% level.
The pipeline and energy services segment also had five individual goals relating to safety results with each goal that was not met reducing the annual incentive award by 1%. The five individual goals were:

o•
each established local safety committee will conduct eight meetings per year

o•
each established local safety committee must conduct four site assessments per year

o•
report vehicle accidents and personal injuries by the end of the next business day, which will be achieved only if 85% or more of the reports are submitted by the end of the next business day

o•
achieve the targeted vehicle accident incident rate of ~~2.25~~1.85 or less and

o•
achieve the targeted personal injury incident rate of ~~2.0~~2.3 or less.
22
~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~

The committee set the pipeline and energy services segment’s ~~2012~~2013 allocated earnings per share ~~and~~target higher than the 2012 target, reflecting increased earnings associated with a full year’s results of our natural gas processing facility. The 2013 allocated earnings per share target was set below the 2012 actual results due to the positive 2012 earnings impact of a benefit related to natural gas gathering operations litigation. The committee set the 2013 return on invested capital target below the ~~2011~~2012 target ~~levels~~level and below the ~~2011~~2012 actual ~~results. The~~results, reflecting increased invested capital in our diesel refinery and reflecting the positive 2012 ~~target levels were based on lower~~earnings impact of a benefit related to natural gas ~~prices and, as a result, lower storage and gas transmission activity.~~
The committee set the MDU Resources Group, Inc. earnings per share target at $1.19 because it was equal to the 2011 result, and the committee believed tying 25% of the incentive award to delivering at least $1.19 in 2012 was appropriate.
The pipeline and energy services segment’s 2012 earnings per share and return on invested capital were 179.8% and 143.1% of their respective 2012 targets, equating to 200% of the target amount attributable to that component. Also, MDU Resources Group, Inc.’s 2012 earnings per share results were $(.01), equating to 0% of the target amount attributable to that component.gathering operations litigation.
Results at the pipeline and energy services segment (before adjustment for the five safety goals) were ~~150%~~44.0% and 57.4%, respectively, of the ~~2012~~2013 allocated earnings per share and return on invested capital measures, resulting in no payment on either component. These results, coupled with MDU Resources Group, Inc.’s earnings per share being 200% of target ~~annual incentive. One of the~~and all five safety goals ~~was not~~being met, ~~because WBI Energy’s personal injury incident rate was 2.67. Therefore, the incentive~~led to overall results ~~were reduced from 150% to 148.5%~~for these segments of 50% of the ~~2012~~2013 target annual incentive.
~~Exploration and Production~~Construction Services Segment Earnings Goal
~~For the exploration and production segment, the 2012~~Mr. Thiede’s 2013 incentive award opportunity was ~~comprised~~established by Mr. Goodin and the former chief executive officer of ~~two components:~~the construction services segment and was left unchanged by the compensation committee when he was promoted. His award opportunity was based solely on the construction services business segment’s 2013 earnings, where the payout could range from no payment if the results were below $14.5 million to 250% of the target amount if the results were at or above $35.8 million.

For the construction services segment, key earnings levels were selected to balance conservative financial planning as well as earnings volatility, instead of tying performance to allocated earnings per share and budgeted return on invested capital. The committee set the business segment’s 2013 earnings target at the level required to deliver a return on invested capital that was approximately equal to the business segment’s weighted average cost of capital. The committee set the earnings required to generate a maximum payment at the level necessary to generate a return on invested capital of approximately 550 basis points above the business segment’s weighted average cost of capital.
The construction services segment’s 2013 earnings were $52.2 million.
Mr. Thiede’s 2013 annual incentive payment was $825,000 or 250% of target.
•
~~The exploration and production business segment component represented 75% of the target award, and payout could range from no payment if the results were below the 85% level to a 200% payout if:~~

o
~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~
o
~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~
•
The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.
~~The committee set the exploration and production segment’s 2012 allocated earnings per share and return on invested capital target levels below the 2011 actual results. The 2012 al~~located earnings per share target level was above the 2011 target level, and the 2012 return on invested capital target level was below the 2011 target level. The 2012 target levels were based on lower natural gas prices and higher depletion, depreciation, and amortization amounts. The committee set the MDU Resources Group, Inc. earnings per share target at $1.19 because it was equal to the 2011 result, and the committee believed tying 25% of the incentive award to delivering at least $1.19 in 2012 was appropriate.
This segment’s 2012 earnings per share and return on invested capital were negative equating to no payment on either component. Also, MDU Resources Group, Inc.’s 2012 earnings per share results were $(.01), equating to 0% of the target amount attributable to that component.
~~Overall results for 2012 were 0%.~~
~~Construction Services and Construction Materials and Contracting Segments~~
For purposes of determining the annual incentive awards of the MDU Resources Group, Inc. executives and the chief executive officer of these segments, these segments were combined. The 2012 award opportunity was comprised of three components:

•
~~The construction services segment component represented 37.5% of the target award, and payout could range from no payment if the results were below the 85% level to a 200% payout if:~~
o
~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~
o
~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~
•
~~The construction materials and contracting segment component represented 37.5% of the award, and payment could range from no payment if the results were below the 85% level to a 200% payout if:~~
o
~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~
o
~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~
•
The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.

MDU Resources Group, Inc.Proxy Statement
23

Proxy Statement

Construction Services and Construction Materials and Contracting Segments Performance Goals
For purposes of determining the annual incentive awards of the MDU Resources Group, Inc. executives, including Messrs. Goodin, Schwartz, and Sandness, these segments were combined, with the targets and weightings structured as follows:

Construction Materials &
Contracting’s 2013 ROIC
results as a % of 2013
target (weighted 18.75%)

Corresponding payment
of annual incentive
target based on ROIC

Construction Materials &
Contracting’s 2013 EPS
results as a % of 2013
target (weighted 18.75%)

Corresponding payment
of annual incentive
target based on EPS

Construction Services’
2013 earnings(1) results
as a % of 2013 target
(weighted 37.5%)

Corresponding payment
of annual incentive
target based on earnings

Less than 85%

0%

Less than 85%

0%

Less than $14.5M

0%

100%

100%

100%

100%

100%

100%

191%

200%

115%

200%

$35.8M or greater

250%

(1)
Earnings is defined as GAAP earnings reported for the construction services segment.
Targets and corresponding payments that fall in between stated levels are set out in more detail in the Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table.
For the construction materials and contracting business segment, the committee set the 2013 allocated earnings per share higher than the 2012 target and higher than 2012 actual result to reflect increased construction activity in western North Dakota, improvement in the Texas operations, and increased asphalt demand. The committee set the ~~construction services business segment’s 2012 allocated earnings per share and~~2013 return on invested capital target ~~levels above~~higher than the ~~2011~~2012 target ~~levels~~level and ~~below~~higher than the ~~2011~~2012 actual ~~results.~~result due to higher anticipated earnings and continued restraint in the growth of the business segment’s invested capital.
The construction services segment’s 2013 earnings were $52.2 million, which was greater than 171% of the earnings target and equated to 250% of the annual incentive target. The construction materials and contracting ~~business~~ segment’s 2012 allocated earnings per share target level was set below the 2011 target level and 2011 actual results, and the 2012 return on invested capital target level was set above the 2011 target level and equal to the 2011 actual results. The 2012 target levels reflected significant uncertainty in the overall construction market, including an absence of a federal highway bill and continued low margins due to competitive bids on construction projects. The committee set the MDU Resources Group, Inc. earnings per share target at $1.19 because it was equal to the 2011 result, and the committee believed tying 25% of the incentive award to delivering at least $1.19 in 2012 was appropriate.
~~The construction services segment’s 2012~~2013 earnings per share and return on invested capital were ~~226.6%~~148.1% and ~~205.4%~~141.9% of their respective ~~2012~~2013 targets, equating to ~~200%~~173.3% of the target incentive amount attributable to that component. The construction materials and contracting segment’s 2012 earnings per share and return on invested capital were 158.1% and 117.1% of their respective 2012 targets, equating to 155.9% of the target amount attributable to that component.those components.
Coupled with MDU Resources Group, Inc.’s ~~2012~~ earnings per share being 200% of target, overall results for 2013 were ~~$(.01), equating to 0%~~208.8% of the ~~target amount attributable to that component.~~
~~Overall results for 2012 were 133.5% of the 2012~~2013 target annual incentive award.
~~Electric and Natural Gas Distribution Segments~~
~~For the electric and natural gas distribution segments,~~The following two tables show the 2012 ~~award opportunity was comprised of two components:~~and 2013 incentive plan performance targets and results by business segment.

2012
Incentive Plan
Performance Targets

2012
Incentive Plan
Results

Name

EPS
Business
Segment
($)

ROIC
(%)

EPS
MDU
Resources
($)

EPS
Business
Segment
($)

ROIC
(%)

EPS
MDU
Resources
($)

Pipeline and Energy Services

0.99

5.8

1.19

1.78

8.3

(.01
)
Exploration and Production

2.10

6.9

1.19

(4.81
)

(13.9
)

(.01
)
Construction Services

3.61

7.4

1.19

8.18

15.2

(.01
)
Construction Materials and Contracting

0.31

3.5

1.19

0.49

4.1

(.01
)
Electric and Natural Gas Distribution

1.16

6.2

1.19

1.08

5.8

(.01
)

2013
Incentive Plan
Performance Targets

2013
Incentive Plan
Results

Name

EPS
Business
Segment
($)

ROIC
(%)

Business
Segment
Earnings
($)

EPS
MDU
Resources
($)

EPS
Business
Segment
($) /
(% of Target)

ROIC
(%) /
(% of Target)

Business
Segment
Earnings
($) /
(% of Target)

EPS
MDU
Resources
($) /
(% of Target)

Pipeline and Energy Services

1.16

5.4

—

1.27

0.51 / 0

3.1 / 0

—

1.49 / 200

Exploration and Production

—

—

84.0

1.27

—

—

98.4 / 200

1.49 / 200

Construction Services

—

—

20.9

—

—

—

52.2 / 250

—

Construction Materials and Contracting

0.52

4.3

—

1.27

0.77 / 200

6.1 / 146.5

—

1.49 / 200

Electric and Natural Gas Distribution

1.20

5.9

—

1.27

1.30 / 155.5

6.1 / 122.6

—

1.49 / 200

•
the electric and natural gas distribution business segments component represented 75% of the target award, and payout could range from no payment if the allocated earnings per share and return on invested capital results were below the 85% level to a 200% payout if:

o
~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~

o
~~the 2012 return on invested capital was at or above the 115% level.~~
•
The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.
The committee set the 2012 target for allocated earnings per share higher than the 2011 targets but lower than 2011 actual results to reflect a one-time income tax benefit in 2011. The committee set the 2012 return on invested capital target at the 2011 target level, which was below 2011 actual results to reflect a one-time income tax benefit in 2011. For 2012, the electric and natural gas distribution segments’ 2012 earnings per share and return on invested capital were 93.1% and 93.6% of their respective targets, equating to 66.7% of the target amount attributable to that component. MDU Resources Group, Inc.’s 2012 earnings per share results were $(.01), equating to 0% of the target amount attributable to that component.
~~Overall results for these segments were 50% of the 2012 target annual incentive award.~~
~~The following table shows the changes in our performance targets and achievements for both 2011 and 2012:~~
2011
Incentive Plan
Performance
Targets 2011
Incentive
Plan Results 2012
Incentive Plan
Performance
Targets 2012
Incentive
Plan Results
EPS EPS
EPS EPS Business MDU
Business MDU Segment ROIC Resources
EPS ROIC EPS ROIC Segment ROIC Resources ($) / (% of (%) / (% of ($) / (% of
Name ($) (%) ($) (%) ($) (%) ($) Target) Target) Target)
Pipeline and Energy Services 1.97 7.9 1.96 7.9 0.99 5.8 1.19 1.78 / 200 8.3 / 200 (.01) / 0
Exploration and Production 1.99 7.1 2.20 7.9 2.10 6.9 1.19 (4.81) / 0 (13.9) / 0 (.01) / 0
Construction Services 2.39 6.0 4.46 9.6 3.61 7.4 1.19 8.18 / 200 15.2 / 200 (.01) / 0
Construction Materials and Contracting 0.35 3.2 0.40 3.5 0.31 3.5 1.19 0.49 / 200 4.1 / 111.8 (.01) / 0
Electric and Natural Gas Distribution 1.14 6.2 1.21 6.5 1.16 6.2 1.19 1.08 / 65.5 5.8 / 67.8 (.01) / 0

24
MDU Resources Group, ~~Inc~~Inc.. Proxy Statement

Proxy Statement

The table below lists each named executive officer’s ~~2012~~2013 base salary, target annual incentive ~~target~~ percentage, and the annual incentive earned.

Name

2012
Base
Salary
(000s)
($)

2012
Annual
Incentive
Target
(%)

2012
Annual
Incentive
Earned
(% of Target)

2012
Annual
Incentive
Earned
(000s)
($)

2013
Base
Salary
(000s)
($)

2013
Target
Annual
Incentive
(%)

2013
Annual
Incentive
Earned
(% of Target)

2013
Annual
Incentive
Earned
(000s)
($)

Terry D. Hildestad

750.0

100

69.1

518.3

David L. Goodin

625.0

150.0

171.8

1,610.6

Doran N. Schwartz

300.0

50

69.1

103.7

345.0

50.0

171.8

296.4

Steven L. Bietz

360.5

65

148.5

348.0

J. Kent Wells

550.0

125

0.0

0.0

570.0

125.0

200.0

1,425.0

William E. Schneider

447.4

65

69.1

201.0

Jeffrey S. Thiede *

366.7

90.0

250.0

825.0

Paul K. Sandness

344.0

60.0

171.8

354.6

*
Mr. Thiede’s 2013 Annual Incentive Earned was established using a base salary that was prorated for 2013 as follows: one-third at an annualized rate of $330,000 and two-thirds at an annualized rate of $385,000.
Messrs. ~~Hildestad’s,~~Goodin’s, Schwartz’s, and ~~Schneider’s 2012~~Sandness’ 2013 annual incentives were paid at ~~69.1%~~171.8% of target based on the following:

Column A
Percentage of
Annual Incentive
Target Achieved

Column B
Percentage of
Average Invested
Capital

Column A x Column B

Column A
Percentage of
Annual Incentive
Target Achieved

Column B
Percentage of
Average Invested
Capital

Column A x Column B

Construction Services Segment and Construction

Materials and Contracting Segment

133.5%
29.2%
39.0%
Construction Services Segment and Construction
Materials and Contracting Segment

208.8%

28.5%

59.5%

Exploration and Production Segment

0.0%
28.1%
0.0%

200.0%

26.6%

53.2%

Pipeline and Energy Services Segment

148.5%
8.8%
13.1%

50.0%

9.8%

4.9%

Electric and Natural Gas Distribution Segments

50.0%

33.9%

17.0%

154.3%

35.1%

54.2%

Total (Payout Percentage)

69.1%

171.8%

Deferral of Annual Incentive Compensation
We provide executives the opportunity to defer receipt of earned annual incentives. If an executive chooses to defer his or her annual incentive, we will credit the deferral with interest at a rate determined by the compensation committee. For ~~2012,~~2013, the committee chose to use the average of (i) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “A” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12 and (ii) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “BBB” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12. This resulted in an interest rate of ~~5.46%~~4.58%. The compensation committee’s reasons for using this approach recognized:

•
incentive deferrals are a low-cost source of capital for the company and

•
incentive deferrals are unsecured obligations and, therefore, carry a higher risk to the executives.
~~2012~~2013 Long-Term Incentives

Performance Share Awards ~~Granted in 2012 under the Long-Term Performance-Based Incentive Plan for Named Executives~~
We use the Long-Term Performance-Based Incentive Plan, which has been approved by our stockholders, for long-term incentive ~~compensation. We use~~compensation, with performance shares as the primary form of long-term incentive compensation. We have not granted stock options since 2001, and in 2011 we amended the plan to no longer permit the grant of stock options or stock appreciation rights; no stock options, stock appreciation rights, or restricted shares are outstanding.
The compensation committee has used relative stockholder return in comparison to the performance graph peer group as the ~~comparator group to determine relative stockholder return and potential payments~~performance measure for a number of years, including the ~~2012~~2013 performance share awards. The performance graph peer group consisted of the following companies when the committee granted performance shares in ~~February 2012:~~March 2013:

•
Alliant Energy Corporation

•
Martin Marietta Materials, Inc.

•
~~Southwest Gas Corporation~~Sterling Construction Company
•
Atmos Energy

•
National Fuel Gas Company

•
~~Sterling Construction~~SM Energy Company
•
Berry Petroleum Company

•
Northwest Natural Gas Company

•
SMSwift Energy Company
•
Black Hills Corporation

•
Pike Electric Corporation

•
~~Swift Energy Company~~Texas Industries
•
Comstock Resources, Inc.

•
Quanta Services, Inc.

•
~~Texas Industries~~Vectren Corporation
•
EMCOR Group, Inc.

•
Questar Corporation

•
~~Vectren Corporation~~Vulcan Materials Company
•
EQT Corporation

•
SCANA Corporation

•
~~Vulcan Materials Company~~Whiting Petroleum Corporation
•
Granite Construction Incorporated

•
~~Southern Union Company~~Southwest Gas Corporation

•
~~Whiting Petroleum Corporation~~

MDU Resources Group, Inc. Proxy Statement
25

Proxy Statement

Since the March 2013 grant, Berry Petroleum Company has been removed from the performance graph peer group because it was acquired.
The performance measure is our total stockholder return over a three-year measurement period as compared to the total stockholder returns of the companies in our performance graph peer group over the same three-year period. The compensation committee selected the relative stockholder return performance measure because it believes executive pay under a long-term, capital accumulation program such as this should mirror our long-term performance in stockholder return as compared to other public companies in our industries. Payments are made in company stock; dividend equivalents are paid in cash. No dividend equivalents are paid on unvested performance shares.
Total stockholder return is the percentage change in the value of an investment in the common stock of a company, from the closing price on the last trading day in the calendar year preceding the beginning of the performance period, through the last trading day in the final year of the performance period. It is assumed that dividends are reinvested in additional shares of common stock at the frequency paid.
As with the target annual incentive, ~~target,~~ we determined the target long-term incentive ~~target~~ for a given position in part from the competitive assessment and in part by the compensation committee’s judgment on the impact each position has on our total stockholder return. ~~From an internal equity standpoint, the~~The committee ~~believed positions in the same salary grade should have the same long-term incentive target level. From an internal equity standpoint, the committee believed in keeping~~kept the chief executive officer’s target long-term incentive ~~target~~ below a level indicated from the competitive assessment. Mr. ~~Hildestad’s~~Goodin’s target was 150% of base salary, below the salary survey median of ~~231%~~309% of base salary and below the performance graph peer group median of 247% of base salary for chief executive officers. The compensation committee has historically set ~~Mr. Hildestad’s~~the president and chief executive officer’s target long-term incentive compensation below the level indicated by the competitive assessment to offset his benefit under the Supplemental Income Security Plan, our nonqualified defined benefit plan, which prior assessments have shown to be higher than competitive levels. ~~The 2012~~
Messrs. Schwartz’s and Wells’ target long-term incentives were unchanged from 2012. Mr. Schwartz’s target long-term incentive ~~targets as a percentage~~of 75% of base salary was below the salary survey median of 119% of base salary and below the performance graph peer group median of 143% of base salary for ~~Messrs. Schwartz, Bietz,~~chief financial officers. Mr. Wells’ target long-term incentive was 200% of base salary, which was above the salary survey median of 113% and ~~Schneider were unchanged~~below the performance graph peer group median of 444% of base salary paid to comparable positions based on survey data and proxy data, respectively, from ~~2011 because the targets were in line with~~ the competitive ~~assessment’s targets.~~assessment. We believe that Mr. Wells’ long-term incentive target ~~is 200%~~enhances retention since he cannot participate in any of our defined benefit retirement plans.
Mr. Thiede received no long-term incentive awards in 2013.
Mr. Sandness’ target long-term incentive was increased from 75% to 85% of base salary ~~which is higher than~~and was slightly below the ~~90% long-term incentive target for other executives in~~ salary ~~grade J. The higher target for Mr. Wells was pursuant to his letter agreement and reflects the committee’s judgment~~survey median of ~~offsetting Mr. Wells’ non-participation in our Supplemental Income Security Plan.~~92% of base salary.
On ~~February 16, 2012,~~March 4, 2013, the board of directors, upon recommendation of the compensation committee, made performance share grants to the named executive ~~officers.~~officers, except Mr. Thiede. The compensation committee determined the target number of performance shares granted to each named executive officer by multiplying the named executive officer’s ~~2012~~2013 base salary by his ~~or her~~target long-term incentive ~~target~~ and then dividing this product by the average of the closing prices of our stock from January 1, ~~2012~~2013 through January 22, ~~2012,~~2013, as shown in the following table:

Name

2012
Base
Salary to
Determine
Target
($)

2012
Long-Term
Incentive
Target at
Time of
Grant
(%)

2012
Long-Term
Incentive
Target at
Time of
Grant
($)

Average
Closing Price
of Our Stock
From January 1
Through
January 22
($)

Resulting
Number of
Performance
Shares
Granted on
February 16
(#)

2013
Base
Salary to
Determine
Target
($)

2013
Target
Long-Term
Incentive
at Time of
Grant
(%)

2013
Target
Long-Term
Incentive
at Time of
Grant
($)

Average
Closing Price
of Our Stock
From January 1
Through
January 22
($)

Resulting
Number of
Performance
Shares
Granted on
March 4
(#)

Terry D. Hildestad

750,000

150

1,125,000

21.54

52,228

David L. Goodin

625,000

150

937,500

21.91

42,788

Doran N. Schwartz

300,000

75

225,000

21.54

10,445

345,000

75

258,750

21.91

11,809

Steven L. Bietz

360,500

90

324,450

21.54

15,062

J. Kent Wells

550,000

200

1,100,000

21.54

51,067

570,000

200

1,140,000

21.91

52,031

William E. Schneider

447,400

90

402,660

21.54

18,693

Jeffrey S. Thiede

—

—

—

—

—

Paul K. Sandness

344,000

85

292,400

21.91

13,345

Assuming our three-year ~~(2012~~(2013 to ~~2014)~~2015) total stockholder return is positive, from 0% to 200% of the target grant will be paid out in February ~~2015~~2016 depending on our total stockholder return compared to the total three-year stockholder returns of companies in our performance graph peer group. The payout percentage will be a function of our rank against our performance graph peer ~~group as follows:~~
~~Long-Term Incentive Payout Percentages~~group.

~~The Company’s~~
~~Percentile Rank~~
~~Payout Percentage of~~
~~February 16, 2012 Grant~~
~~90th or higher~~
~~200~~
%
~~70th~~
~~150~~
%
~~50th~~
~~100~~
%
~~40th~~
10
%
~~Less than 40th~~
0
%

26
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
During 2012, the compensation committee reviewed its long-term incentive award program and the use of performance shares as the only long-term award and relative total stockholder return as the sole performance measure. After considering alternative approaches, the committee determined to continue using performance shares as the only long-term award in order to keep long-term incentives based solely on performance. However, the committee modified the program due to:
•
the added difficulty of comparing the company’s diversified operations to a peer group comprised primarily of single industry firms and
•
a number of the performance graph peer group companies also grant awards based solely on time vesting.
The committee determined, in order to be competitive and keep executives incentivized, to lower the threshold performance level from the 40th percentile to the 25th percentile and increase the threshold payout percentage from 10% to 20%. In addition, the performance level for maximum payout was lowered from the 90th percentile to the 75th percentile, as follows:
Long-Term Incentive Payout Percentages
The Company’s
Percentile Rank
Payout Percentage of
March 4, 2013 Grant
75th or higher
200%
50th
100%
25th
20%
Less than 25th
0%

Payouts for percentile ranks falling between the intervals will be interpolated. We also will pay dividend equivalents in cash on the number of shares actually earned for the performance period. The dividend equivalents will be paid in ~~2015~~2016 at the same time as the performance share awards are paid.
IfAs had been established for awards granted beginning in 2011, if our total stockholder return is negative, the shares and dividend equivalents otherwise earned, if any, will be reduced in accordance with the following table:

~~TSR~~Total Stockholder Return

Reduction in Award
0% through -5%

50
%50%

-5.01% through -10%

60
%60%

-10.01% through -15%

70
%70%

-15.01% through -20%

80
%80%

-20.01% through -25%

90
%90%

-25.01% or below

~~100~~
%100%

The named executive officers must retain 50% of the net after-tax shares that are earned pursuant to this long-term incentive award until the earlier of (i) the end of the two-year period commencing on the date any shares earned under the award are issued and (ii) the executive’s termination of employment.
No Payment in February ~~2012~~2013 for ~~2009~~2010 Grants under the Long-Term Performance-Based Incentive Plan
We granted performance shares to our named executive officers under the Long-Term Performance-Based Incentive Plan on ~~February 12, 2009~~March 5, 2010 for the ~~2009~~2010 through ~~2011~~2012 performance period. Our total stockholder return for the ~~2009~~2010 through ~~2011~~2012 performance period was ~~9.25%~~(1.22)%, which corresponded to a percentile rank of ~~25%~~13% against our performance graph peer group and resulted in no shares or dividend equivalents being paid to the named executive officers.
~~PEER Analysis: Comparison~~Clawback
In November 2005, we implemented a guideline for repayment of ~~Pay for Performance Ratios~~
~~Each year we compare our named executive officers’ pay for performance ratios~~incentives due to accounting restatements, commonly referred to as a clawback policy, whereby the ~~pay for performance ratios~~compensation committee may seek repayment of ~~the named executive officers in the performance graph peer group. This analysis compares the relationship between our compensation levels~~annual and ~~our average annual total stockholder return to the peer group over a five-year period. All data used in the analysis, including the valuation of~~ long-term incentives paid to executives if accounting restatements occur within three years after the payment of incentives under the annual and ~~calculation of stockholder return, were compiled by Equilar, Inc., an independent service provider, which is based on each company’s annual filings for its data collection.~~
~~This analysis consisted of dividing what we paid~~long-term plans. Under our ~~named executive officers for~~clawback policy, the years 2007 through 2011 by our average annual total stockholder return for the same five-year period to yield our pay ratio. Our pay ratio was then compared to the pay ratio of the companies in the performance graph peer group, which was calculated by dividing total direct compensation for all the proxy group executives by the sum of each company’s average annual total stockholder return for the same five-year period.
For the five-year period of 2007 through 2011, our average annual stockholder return was minus .88%. Therefore, our pay ratio is not a meaningful statistic and a comparison to the pay ratio of the companies in the performance graph peer group could not be made. The compensation committee ~~believes that~~may require executives to forfeit awards and may rescind vesting, or the ~~analysis continues to serve a useful purpose in its annual review~~acceleration of ~~compensation despite the effect~~vesting, of ~~the negative stockholder return for the 2007 through 2011 period.~~an award.
MDU Resources Group, Inc. Proxy Statement
27

Proxy Statement
Post-Termination Compensation and Benefits
Pension Plans
Effective in 2006, we no longer offer defined benefit pension plans to new non-bargaining unit employees. The defined benefit plans available to employees hired before 2006 were amended to cease benefit accruals as of December 31, 2009. The frozen benefit provided through our qualified defined benefit pension plans is determined by years of service and base salary. Effective 2010, for those employees who were participants in defined benefit pension plans and for executives and other non-bargaining unit employees hired after 2006, the company offers increased company contributions to our 401(k) plan. For non-bargaining unit employees hired after 2006, the retirement contribution is 5% of plan eligible compensation. For participants hired prior to 2006, retirement contributions are based on the participant’s age as of December 31, 2009. The retirement contribution is 11.5% for ~~each of the named executive officers, except~~Mr. Goodin and Mr. Sandness, 10.5% for Mr. Schwartz, ~~who is eligible~~and 5% for ~~10.5%~~Mr. Wells and Mr. ~~Wells who is eligible for 5%.~~Thiede.
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
27

~~Proxy Statement~~
Supplemental Income Security Plan
Benefits Offered
We offer certain key managers and executives, including all of our named executive officers, except Mr. Wells and Mr. Thiede, benefits under our nonqualified retirement plan, which we refer to as the Supplemental Income Security Plan or SISP. The SISP has a ten-year vesting schedule and was amended to add an additional vesting requirement for benefit level increases occurring on or after January 1, 2010. The SISP provides participants with additional retirement income and death benefits.
We believe the SISP is ~~critical~~effective in retaining the talent necessary to drive long-term stockholder value. In addition, we believe that the ten-year vesting provision of the SISP, augmented by an additional three years of vesting for benefit level increases occurring on or after January 1, 2010, helps promote retention of key executive officers.
Benefit Levels
The chief executive officer recommends benefit level increases to the compensation committee for participants except himself. The chief executive officer considers, among other things, the participant’s salary in relation to the salary ranges that correspond with the SISP benefit levels, the participant’s performance, the performance of the applicable business segment or the company, and the cost associated with the benefit level increase.
The chief executive ~~officer did not recommend~~recommended, and the compensation committee approved, a ~~2012~~2013 SISP benefit level increase for ~~any~~Mr. Schwartz. The benefit level increase corresponded to one level below which Mr. Schwartz’s 2013 salary would otherwise qualify. The recommendation was to recognize Mr. Schwartz’s performance relating to the successful renewal of the ~~named executive officers, and the~~company’s credit facility.
The committee ~~chose not to grant~~also approved a ~~2012~~2013 SISP benefit level increase for Mr. Goodin. The benefit level increase corresponded to one level below which Mr. Goodin’s 2013 salary would otherwise qualify. The benefit level increase recognized Mr. Goodin’s promotion to the president and chief executive ~~officer.~~officer position. The following table reflects our named executive officers’ SISP levels as of December 31, ~~2012:~~2013:

December 31, 2012
Annual SISP Benefits

December 31, 2013
Annual SISP Benefits

Name

Survivor
($)

Retirement
($)

Survivor
($)

Retirement
($)

Terry D. Hildestad

1,025,040

512,520

David L. Goodin

552,960

276,480

Doran N. Schwartz

175,200

87,600

233,184

116,592

Steven L. Bietz

386,640

193,320

J. Kent Wells

N/A

N/A

N/A

N/A

William E. Schneider

548,400

274,200

Jeffrey S. Thiede

N/A

N/A

Paul K. Sandness

328,080

164,040

~~Clawback~~Nonqualified Defined Contribution Plan
~~In November 2005, we implemented~~The company adopted the Nonqualified Defined Contribution Plan, or NQDCP, effective January 1, 2012, to provide deferred compensation for a ~~guideline~~select group of management or highly compensated employees who do not participate in the SISP. The compensation committee, upon recommendation from the chief executive officer, determines which employees will participate in the NQDCP for ~~repayment~~any year. The compensation committee determines the amount of ~~incentives due~~employer contributions under the plan, which are credited to ~~accounting restatements, commonly referred~~plan accounts and not funded. After satisfying a four-year vesting requirement for each contribution, the contributions and investment earnings will be distributed to the executive in a lump sum upon separation from service with the company or in annual installments commencing upon the later of (i) separation from service and (ii) age 65. The four-year vesting requirement is waived if the participant dies while employed by the company.
28
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
The committee, upon recommendation of the chief executive officer, selected Mr. Thiede as a ~~clawback policy, whereby~~participant for 2013 with an employer contribution of $33,000 or 10% of his base salary as of January 1, 2013. The contribution was awarded to recognize his promotion to president of the ~~compensation committee may seek repayment of annual~~construction services segment and long-term incentives paid to executives if accounting restatements occur within three years after the payment of incentives under the annual and long-term plans. Under our clawback policy, the compensation committee may require executives to forfeit awards and may rescind vesting, or the acceleration of vesting,achievement of an ~~award.~~annualized return on invested capital that was 4.7 percentage points higher than the weighted average cost of capital for the construction services segment. We believe that Mr. Thiede’s participation in this plan and the four-year vesting requirement enhances retention since he cannot participate in any of our defined benefit retirement plans.
Impact of Tax and Accounting Treatment
The compensation committee may consider the impact of tax and/or accounting treatment in determining compensation. Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount of compensation paid to certain officers that we may deduct as a business expense in any tax year unless, among other things, the compensation qualifies as performance-based compensation, as that term is used in Section 162(m). Generally, long-term incentive compensation and annual incentive awards for our chief executive officer and those executive officers whose overall compensation is likely to exceed $1 million are structured to be deductible for purposes of Section 162(m) of the Internal Revenue Code, but we may pay compensation to an executive officer that is not deductible. All annual or long-term incentive compensation paid to our named executive officers in ~~2012~~2013 satisfied the requirements for ~~deductibility, except for $48,129 paid to Mr. Wells.~~deductibility.
Section 409A of the Internal Revenue Code imposes additional income taxes on executive officers for certain types of deferred compensation if the deferral does not comply with Section 409A. We have amended our compensation plans and arrangements affected by Section 409A with the objective of not triggering any additional income taxes under Section 409A.
Section 4999 of the Internal Revenue Code imposes an excise tax on payments to executives and others of amounts that are considered to be related to a change of control if they exceed levels specified in Section 280G of the Internal Revenue Code. To the extent a change in control triggers liability for an excise tax, payment of the excise tax will be made by the individual. The company will not pay the excise tax. We do not consider the potential impact of Section 4999 or 280G when designing our compensation programs.
28
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~
The compensation committee also considers the accounting and cash flow implications of various forms of executive compensation. In our financial statements, we record salaries and annual incentive compensation as expenses in the amount paid, or to be paid, to the named executive officers. For our equity awards, accounting rules also require that we record an expense in our financial statements. We calculate the accounting expense of equity awards to employees in accordance with Financial Accounting Standards Board generally accepted accounting principles for stock-based compensation.
Stock Ownership Requirements
We instituted stock ownership guidelines on May 5, 1993, which we revised in November 2010 to provide that executives who participate in our Long-Term Performance-Based Incentive Plan are required within five years to own our common stock equal to a multiple of their base salaries. Stock owned through our 401(k) plan or by a spouse is considered in ownership calculations. Unvested performance shares and other unvested equity awards are not considered in ownership calculations. The level of stock ownership compared to the requirements is determined based on the closing sale price of the stock on the last trading day of the year and base salary at December 31 of each year. Each February, the compensation committee receives a report on the status of stock holdings by executives. The committee may, in its sole discretion, grant an extension of time to meet the ownership requirements or take such other action as it deems appropriate to enable the executive to achieve compliance with the policy. The table shows the named executive officers’ holdings as of December 31, ~~2012:~~2013:

Name

Assigned
Guideline
Multiple of
Base Salary

Actual
Holdings as a
Multiple of
Base Salary

Number of
Years at
Guideline
Multiple
(#)

Assigned
Guideline
Multiple of
Base Salary

Actual
Holdings as a
Multiple of
Base Salary

Number of
Years at
Guideline
Multiple
(#)

Terry D. Hildestad

4X

6.06

7.67

David L. Goodin

4X

2.13

1.00
(1)
Doran N. Schwartz

3X

1.75

2.87
(1)

3X

2.54

3.87
(2)
Steven L. Bietz

3X

4.09

10.33

J. Kent Wells

3X

1.07

1.67
(2)

3X

1.49

2.67
(3)
William E. Schneider

3X

4.96

11.00

Jeffrey S. Thiede

3X

0.15

(4)

Paul K. Sandness

3X

4.80

9.75

(1)
Participant must meet ownership requirement by January 1, ~~2015.~~2018.
(2)
Participant must meet ownership requirement by January 1, 2015.
(3)
Participant must meet ownership requirement by May 1, 2016.
(4)
Participant must meet ownership requirement by January 1, 2019.
MDU Resources Group, Inc. Proxy Statement
29

Proxy Statement
The compensation committee may consider the policy and the executive’s stock ownership in determining compensation. The committee, however, did not do so with respect to ~~2012~~2013 compensation.
Policy Regarding Hedging Stock Ownership
Our executive compensation policy prohibits Section 16 officers from hedging their ownership of company common stock. Executives may not enter into transactions that allow the executive to benefit from devaluation of our stock or otherwise own stock technically but without the full benefits and risks of such ownership. See the Security Ownership section of the proxy statement for our policy on margin accounts and pledging of our stock.
Compensation Committee Report
The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Regulation S-K, Item 402(b), with management. Based on the review and discussions referred to in the preceding sentence, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in our proxy statement on Schedule 14A.
Thomas Everist, Chairman
Karen B. Fagg
Thomas C. Knudson
Patricia L. Moss

30
MDU Resources Group, Inc. Proxy Statement
29

Proxy Statement

~~Summary Compensation Table for 2012~~

Name and
Principal Position
(a)
Year
(b)

Salary
($)
(c)

Bonus
($)
(d)

Stock
Awards
($)
(e)(1)

Option
Awards
($)
(f)

Non-Equity
Incentive Plan
Compensation
($)
(g)

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)(2)

All Other
Compensation
($)
(i)

Total
($)
(j)
Terry D. Hildestad

2012

750,000

—

897,277

—

518,250

355,027

38,224
(3)
2,558,778

President and CEO

2011

750,000

—

1,084,318

—

954,750

739,760

37,499

3,566,327

2010

750,000

—

830,137

—

762,750

480,532

37,499

2,860,918

Doran N. Schwartz

2012

300,000

—

179,445

—

103,650

100,935

34,224
(3)
718,254

Vice President and CFO

2011

273,000

—

197,341

—

173,765

147,789

33,549

825,444

2010

252,454

—

143,881

—

127,053

71,302

33,549

628,239

Steven L. Bietz

2012

360,500

—

258,765

—

347,973

329,969

37,884
(3)
1,335,091

President and CEO

2011

360,500

—

312,704

—

229,198

545,066

37,159

1,484,627

of WBI Holdings, Inc.

2010

350,000

—

232,429

—

245,245

302,863

36,218

1,166,755

J. Kent Wells

2012

550,000

—

877,331

—

—

—

96,470
(3)
1,523,801

President and CEO of

2011

367,671

916,685
(4)
925,000
(5)
—

1,007,306
(6)
—

84,580
(7)
3,301,242

Fidelity Exploration & Production Company

2010

—

—

—

—

—

—

—

—

William E. Schneider

2012

447,400

—

321,146

—

200,950

240,068

38,224
(3)
1,247,788

Executive Vice President -

2011

447,400

—

388,086

—

436,215

412,085

37,499

1,721,285

Bakken Development

2010

447,400

—

297,122

—

37,805

306,909

37,499

1,126,735

Summary Compensation Table for 2013

Name and
Principal Position
(a)

Year
(b)

Salary
($)
(c)

Bonus
($)
(d)

Stock
Awards
($)
(e)(1)

Option
Awards
($)
(f)

Non-Equity
Incentive Plan
Compensation
($)
(g)

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(h)(2)

All Other
Compensation
($)
(i)

Total
($)
(j)

David L. Goodin

2013

625,000

—

1,241,280

—

1,610,625

532,991

37,517
(3)

4,047,413

President and CEO

2012

—

—

—

—

—

—

—

—

2011

—

—

—

—

—

—

—

—

Terry D. Hildestad

2013

74,481
(4)
—

—

—

—

17,928

13,565
(3)

105,974

President and CEO

2012

750,000

—

897,277

—

518,250

355,027

38,224

2,558,778

2011

750,000

—

1,084,318

—

954,750

739,760

37,499

3,566,327

Doran N. Schwartz

2013

345,000

—

342,579

—

296,355

28,459

34,881
(3)

1,047,274

Vice President and CFO

2012

300,000

—

179,445

—

103,650

100,935

34,224

718,254

2011

273,000

—

197,341

—

173,765

147,789

33,549

825,444

J. Kent Wells

2013

570,000

—

1,509,419

—

1,425,000

—

20,556
(3)

3,524,975

Vice Chairman of the

2012

550,000

—

877,331

—

—

—

96,470

1,523,801

Corporation and

2011

367,671

916,685
(5)

925,000
(6)
—

1,007,306
(7)

—

84,580
(8)

3,301,242

President and CEO of

Fidelity Exploration &

Production Company

Jeffrey S. Thiede

2013

367,068

—

—

—

825,000

—

66,282
(3)

1,258,350

President and CEO of

2012

—

—

—

—

—

—

—

—

MDU Construction

2011

—

—

—

—

—

—

—

—

Services Group, Inc.

Paul K. Sandness

2013

344,000

—

387,138

—

354,595

—

39,131
(3)

1,124,864

General Counsel and

2012

—

—

—

—

—

—

—

—

Secretary

2011

—

—

—

—

—

—

—

—

(1)
Amounts in this column represent the aggregate grant date fair value of the performance share awards calculated in accordance with Financial Accounting Standards Board generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. This column was prepared assuming none of the awards will be forfeited. The amounts were calculated using a Monte Carlo simulation, as described in Note 13 of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

(2)
Amounts shown represent the change in the actuarial present value for years ended December 31, ~~2010,~~ 2011, 2012, and ~~2012~~2013 for the named executive officers’ accumulated benefits under the pension plan, excess SISP, and SISP, collectively referred to as the “accumulated pension change,” plus ~~above market~~above-market earnings on deferred annual incentives, if any. The amounts shown are based on accumulated pension change and ~~above market~~above-market earnings as of December 31, ~~2010,~~ 2011, 2012, and ~~2012,~~2013, as follows:

Accumulated
Pension Change

Above Market
Earnings

Accumulated
Pension Change

Above-Market
Earnings

Name

12/31/2010
($)

12/31/2011
($)

12/31/2012
($)

12/31/2010
($)

12/31/2011
($)

12/31/2012
($)

12/31/2011
($)

12/31/2012
($)

12/31/2013
($)

12/31/2011
($)

12/31/2012
($)

12/31/2013
($)

David L. Goodin

—

—

532,986

—

—

5

Terry D. Hildestad

462,186

728,587

331,845

18,346

11,173

23,182

728,587

331,845

(582,178
)

11,173

23,182

17,928

Doran N. Schwartz

71,302

147,789

100,935

—

—

—

147,789

100,935

28,459

—

—

—

Steven L. Bietz

302,863

545,066

329,969

—

—

—

J. Kent Wells

—

—

—

—

—

—

—

—

—

—

—

—

William E. Schneider

277,507

393,768

201,944

29,402

18,317

38,124

Jeffrey S. Thiede

—

—

—

—

—

—

Paul K. Sandness

—

—

(170,904
)

—

—

—

30
MDU Resources Group, Inc. Proxy Statement
31

Proxy Statement

(3)

401(k)
($)(a)

Life
Insurance
Premium
($)

Matching
Charitable
Contribution
($)

Automobile
Allowance
($)

Additional
LTD
Premium
($)

Nonqualified
Defined
Contribution
Plan
($)

Total
($)

David L. Goodin

36,975

242

300

—

—

—

37,517

Terry D. Hildestad

11,752

13

1,800

—

—

—

13,565

Doran N. Schwartz

34,425

156

300

—

—

—

34,881

J. Kent Wells

20,400

156

—

—

—

—

20,556

Jeffrey S. Thiede

20,400

156

—

12,000

726

33,000

66,282

Paul K. Sandness

36,975

156

2,000

—

—

—

39,131

~~(3)~~

401(k)
($)(a)

Life
Insurance
Premium
($)

Matching
Charitable
Contribution
($)

Additional
LTD
Premium
($)

Relocation
($)

Parking
($)

Payment
In Lieu
of
Medical
Coverage
($)

Spousal
Travel
($)

Total
($)

Terry D. Hildestad

36,250

174

1,800

—

—

—

—

—

38,224

Doran N. Schwartz

33,750

174

300

—

—

—

—

—

34,224

Steven L. Bietz

36,250

174

1,460

—

—

—

—

—

37,884

J. Kent Wells

20,000

174

—

435

69,695

3,600

1,200

1,366

96,470

William E. Schneider

36,250

174

1,800

—

—

—

—

—

38,224

(a)
Represents company contributions to 401(k) plan, which include matching contributions and contributions made in lieu of pension plan accruals after pension plans were frozen at December 31, 2009.

(4)
Mr. Hildestad’s reported salary includes $65,827 of vacation payout.
(5)
Includes a cash recruitment payment of $550,000 and guaranteed target annual incentive payment of $366,685.

~~(5)~~(6)
Represents the aggregate grant date fair value of the portion of Mr. Wells’ additional 2011 annual incentive award that was paid in shares of our common stock calculated in accordance with Financial Accounting Standards Board generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718.

~~(6)~~(7)
Includes $82,296, the value of Mr. Wells’ annual incentive earned above the guaranteed target amount and the $925,010 cash portion of Mr. Wells’ additional 2011 annual incentive.

~~(7)~~(8)
The 2011 amount for Mr. Wells’ all other compensation has been reduced to reflect the removal of $4,925, an excess 401(k) company match, that exceeded the limit when contributions from his prior company and current company were aggregated.
Grants of Plan-Based Awards in ~~2012~~2013

All Other

All Other

Stock

Option

Grant

Awards:

Awards:

Exercise

Date Fair

Estimated Future

Estimated Future

Number of

Number of

or Base

Value of

Payouts Under Non-Equity

Payouts Under Equity

Shares of

Securities

Price of

Stock and

Incentive Plan Awards

Incentive Plan Awards

Stock or

Underlying

Option

Option

Grant

Threshold

Target

Maximum

Threshold

Target

Maximum

Units

Options

Awards

Awards

Name

Date

($)

($)

($)

(#)

(#)

(#)

(#)

(#)

($/Sh)

($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

Terry D.

3/1/2012(1
)
187,500

750,000

1,500,000

—

—

—

—

—

—

—

Hildestad

2/16/2012(2
)
—

—

—

5,223

52,228

104,456

—

—

—

897,277

Doran N.

3/1/2012(1
)
37,500

150,000

300,000

—

—

—

—

—

—

—

Schwartz

2/16/2012(2
)
—

—

—

1,045

10,445

20,890

—

—

—

179,445

Steven L.

3/1/2012(1
)
58,581

234,325

468,650

—

—

—

—

—

—

—

Bietz

2/16/2012(2
)
—

—

—

1,506

15,062

30,124

—

—

—

258,765

J. Kent Wells

3/1/2012(1
)
171,875

687,500

1,375,000

—

—

—

—

—

—

—

2/16/2012(2
)
—

—

—

5,107

51,067

102,134

—

—

—

877,331

William E.

3/1/2012(1
)
72,703

290,810

581,620

—

—

—

—

—

—

—

Schneider

2/16/2012(2
)
—

—

—

1,869

18,693

37,386

—

—

—

321,146

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
(i)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(j)

Exercise
or Base
Price of
Option
Awards
($/Sh)
(k)

Grant
Date Fair
Value of
Stock and
Option
Awards
($)
(l)

Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards

Estimated Future
Payouts Under Equity
Incentive Plan Awards

Name
(a)

Grant
Date
(b)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

David L.

3/4/2013(1
)

290,625

937,500

1,940,625

—

—

—

—

—

—

—

Goodin

3/4/2013(2
)

—

—

—

8,558

42,788

85,576

—

—

—

1,241,280

Terry D.

—

—

—

—

—

—

—

—

—

—

—

Hildestad

—

—

—

—

—

—

—

—

—

—

—

Doran N.

3/4/2013(3
)

53,475

172,500

357,075

—

—

—

—

—

—

—

Schwartz

3/4/2013(2
)

—

—

—

2,362

11,809

23,618

—

—

—

342,579

J. Kent Wells

3/4/2013(1
)

178,125

712,500

1,425,000

—

—

—

—

—

—

—

3/4/2013(2
)

—

—

—

10,406

52,031

104,062

—

—

—

1,509,419

Jeffrey S.

2/7/2013(3
)

231,000

330,000

825,000

—

—

—

—

—

—

—

Thiede

—

—

—

—

—

—

—

—

—

—

—

Paul K.

3/4/2013(3
)

63,984

206,400

427,248

—

—

—

—

—

—

—

Sandness

3/4/2013(2
)

—

—

—

2,669

13,345

26,690

—

—

—

387,138

(1)
Annual incentive for ~~2012~~2013 granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive ~~Plan, except for Mr. Schwartz whose award was granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation~~ Plan.

(2)
Performance shares for the ~~2012-2014~~2013-2015 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan.
(3)
Annual incentive for 2013 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan.
Narrative Discussion Relating to the Summary Compensation Table
and Grants of Plan-Based Awards Table
Incentive Awards
Annual Incentive
On March ~~1, 2012,~~4, 2013, the compensation committee recommended the ~~2012~~2013 annual incentive award opportunities for our named executive officers, except for Mr. Thiede, and the board approved these opportunities at its meeting on March ~~1, 2012.~~4, 2013. Mr. Thiede’s 2013 annual incentive award opportunity was established on February 7, 2013 by Mr. Goodin and the former chief executive officer of the construction services segment and was left unchanged by the compensation committee when he was promoted. These award opportunities are reflected in the Grants of Plan-Based Awards table at grant on March ~~1, 2012,~~4, 2013, (February 7, 2013 for Mr. Thiede) in columns (c), (d), and (e) and in the Summary Compensation Table as earned with respect to ~~2012~~2013 in column (g).

32
MDU Resources Group, Inc. Proxy Statement
31

Proxy Statement

Executive officers may receive a payment of annual cash incentive awards based upon achievement of annual performance measures with a threshold, target, and maximum level. A target incentive award is established based on a percent of the executive’s base salary. ~~Actual~~Based upon achievement of goals, actual payment may range from 0% to 207% of the target for Messrs. Goodin, Schwartz, and Sandness, from 0% to 200% of the target ~~based upon achievement~~for Mr. Wells, and from 0% to 250% of ~~goals.~~the target for Mr. Thiede.
In order to be eligible to receive a payment of an annual incentive award under the Long-Term Performance-Based Incentive Plan, Messrs. ~~Hildestad, Bietz,~~Goodin and Wells ~~and Schneider~~ must have remained employed by the company through December 31, ~~2012,~~2013, unless the compensation committee determines otherwise. The committee has full discretion to determine the extent to which goals have been achieved, the payment level, whether any final payment will be made, and whether to adjust awards downward based upon individual performance. Unless otherwise determined and established in writing by the compensation committee within 90 days of the beginning of the performance period, the performance goals may not be adjusted if the adjustment would increase the annual incentive award payment. The compensation committee may use negative discretion and adjust any annual incentive award payment downward, using any subjective or objective measures as it shall determine, including but not limited to the 20% limitation described in the following sentence. The 20% limitation means that no more than 20% of after-tax earnings that are in excess of planned earnings at the business segment level for operating company executives and at the MDU Resources Group level for corporate executives will be paid in annual incentives to executives.determine. The application of ~~this limitation or~~ any ~~other~~ reduction, and the methodology used in determining any such reduction, is in the sole discretion of the compensation committee.
With respect to annual incentive awards granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan, which includes ~~Mr.~~Messrs. Schwartz, Thiede, and Sandness, participants who retire during the year at age 65 ~~during the year~~pursuant to their employer’s bylaws remain eligible to receive an award. Subject to the compensation committee’s discretion, executives who terminate employment for other reasons are not eligible for an award. The compensation committee has full discretion to determine the extent to which goals have been achieved, the payment level, and whether any final payment will be made. Once performance goals are approved by the committee for executive incentive compensation plan awards, the committee generally does not modify the goals. However, if major unforeseen changes in economic and environmental conditions or other significant factors beyond the control of management substantially affected management’s ability to achieve the specified performance goals, the committee, in consultation with the chief executive officer, may modify the performance goals. Such goal modifications will only be considered in years of unusually adverse or favorable external conditions.

Annual incentive award payments for Messrs. ~~Hildestad,~~Goodin, Schwartz, and ~~Schneider~~Sandness were determined based on achievement of performance goals at the following business segments – (i) construction services and construction materials and contracting, (ii) exploration and production, (iii) pipeline and energy services, and (iv) electric and natural gas distribution -– and were calculated as follows:

Column A
Percentage of
Annual Incentive
Target Achieved

Column B
Percentage of
Average Invested
Capital

Column A x Column B

Column A
Percentage of
Annual Incentive
Target Achieved

Column B
Percentage of
Average Invested
Capital

Column A x Column B
Construction Services Segment and
Construction Materials and Contracting Segment

133.5
%

29.2
%

39.0
%

208.8
%

28.5
%

59.5
%
Exploration and Production Segment

0.0
%

28.1
%

0.0
%

200.0
%

26.6
%

53.2
%
Pipeline and Energy Services Segment

148.5
%

8.8
%

13.1
%

50.0
%

9.8
%

4.9
%
Electric and Natural Gas Distribution Segments

50.0
%

33.9
%

17.0
%

154.3
%

35.1
%

54.2
%
Total (Payout Percentage)

69.1
%

171.8
%

The award opportunity available to Mr. ~~Bietz~~Wells was:

Pipeline and Energy Services’ 2012
return on invested capital results
as a % (weighted 37.5%)
of 2012 target Corresponding payment of
annual incentive target based on
return on invested capital Pipeline and Energy Services’ 2012
earnings per share results
as a % (weighted 37.5%)
of 2012 target Corresponding payment of
annual incentive target based on
earnings per share
Less than 85%     0% Less than 85%     0%
  85%   25%   85%   25%
  90%   50%   90%   50%
  95%   75%   95%   75%
100% 100% 100% 100%
103% 120% 103% 120%
106% 140% 106% 140%
109% 160% 109% 160%
112% 180% 112% 180%
115% 200% 115% 200%

Exploration and Production’s 2013
earnings* results as a % of 2013
target (weighted 75.0%)

Corresponding payment of
annual incentive target
based on earnings

MDU Resources Group, Inc.’s
consolidated 2013 earnings per share
results as a % of target (weighted 25%)

Corresponding payment of annual
incentive target based on con-
solidated earnings per share result
Less than 90%

0
%

Less than 85%

0
%
90
%

25
%

85
%

25
%
100
%

100
%

90
%

50
%
101
%

120
%

95
%

75
%
102
%

140
%

100
%

100
%
103
%

160
%

103
%

120
%
104
%

180
%

106
%

140
%
105
%

200
%

109
%

160
%

112
%

180
%

115
%

200
%
* Earnings is defined as GAAP earnings reported for the exploration and production segment, adjusted to exclude the (i) effect on earnings of any noncash write-downs of oil and natural gas properties due to ceiling test impairment charges and any associated earnings benefit resulting from lower depletion, depreciation, and amortization expenses and (ii) the effect on earnings of any noncash gains and losses that result from (x) ineffectiveness in hedge accounting, (y) derivatives that no longer qualify for hedge accounting treatment, or (z) the discontinuation of hedge accounting treatment.

32
MDU Resources Group, Inc. Proxy Statement
33

Proxy Statement

MDU Resources Group, Inc.’s
consolidated 2012 earnings per share
results (weighted 25%)

Corresponding payment of
annual incentive target based on
consolidated earnings per share results

Less than 100%

0
%

100
%

100
%

103
%

120
%

106
%

140
%

109
%

160
%

112
%

180
%

115
%

200
%

The award opportunity available to Mr. ~~Wells~~Thiede was:

Exploration and Production’s 2012
return on invested capital results
as a % (weighted 37.5%)
of 2012 target

Corresponding payment of
annual incentive target based on
return on invested capital

Exploration and Production’s 2012
earnings per share results
as a % (weighted 37.5%)
of 2012 target

Corresponding payment of
annual incentive target based on
earnings per share

Less than 85%

0
%

Less than 85%

0
%

85
%

25
%

85
%

25
%

90
%

50
%

90
%

50
%

95
%

75
%

95
%

75
%

100
%

100
%

100
%

100
%

108
%

120
%

103
%

120
%

116
%

140
%

106
%

140
%

124
%

160
%

109
%

160
%

132
%

180
%

112
%

180
%

140
%

200
%

115
%

200
%

MDU Resources Group, Inc.’s
consolidated 2012 earnings per share
results (weighted 25%)

Corresponding payment of
annual incentive target based on
consolidated earnings per share results

Less than 100%

0
%

100
%

100
%

103
%

120
%

106
%

140
%

109
%

160
%

112
%

180
%

115
%

200
%

Construction Services’ 2013
earnings* results as a % of 2013
target (weighted 100%)

Corresponding payment of
annual incentive target
based on earnings
Less than 70%

0%
70%

70%

100%

100%

116%

130%

130%

160%

144%

190%

157%

220%

171%

250%

* Earnings is defined as GAAP earnings reported for the construction services segment.
For discussion of the specific incentive plan performance targets and results, please see the Compensation Discussion and Analysis.
Long-Term Incentive
On ~~February 14, 2012,~~March 4, 2013, the compensation committee recommended long-term incentive grants to the named executive officers, except for Mr. Thiede, in the form of performance shares, and the board approved these grants at its meeting on ~~February 16, 2012.~~March 4, 2013. These grants are reflected in columns (f), (g), (h), and (l) of the Grants of Plan-Based Awards table and in column (e) of the Summary Compensation Table.
If the company’s ~~2012-2014~~2013-2015 total ~~shareholder~~stockholder return is positive, from 0% to 200% of the target grant will be paid out in February ~~2015,~~2016, depending on our ~~2012-2014~~2013-2015 total stockholder return compared to the total three-year stockholder returns of companies in our performance graph peer group. The payout percentage is determined as follows:

The Company’s Percentile Rank

Payout Percentage of
~~February 16, 2012~~March 4, 2013 Grant
~~90th~~75th or higher

~~200~~
%
~~70th~~
~~150~~
%200%

50th

~~100~~
%100%

~~40th~~25th

10
%20%

Less than ~~40th~~25th

0
%0%

Payouts for percentile ranks falling between the intervals will be interpolated. We also will pay dividend equivalents in cash on the number of shares actually earned for the performance period. The dividend equivalents will be paid in ~~2015~~2016 at the same time as the performance share awards are paid.
If the common stock of a company in the peer group ceases to be traded at any time during the ~~2012-2014~~2013-2015 performance period, the company will be deleted from the peer group. Percentile rank will be calculated without regard to the return of the deleted company. If MDU Resources Group, Inc. or a company in the peer group spins off a segment of its business, the shares of the spun-off entity will be treated as a cash dividend that is reinvested in MDU Resources Group, Inc. or the company in the peer group.
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
33

~~Proxy Statement~~
If the company’s ~~2012-2014~~2013-2015 total ~~shareholder~~stockholder return is negative, the number of shares otherwise earned, if any, for the performance period will be reduced in accordance with the following table:

~~TSR~~Total Stockholder Return

Reduction in Award
0% through -5%

50
%50%

-5.01% through -10%

60
%60%

-10.01% through -15%

70
%70%

-15.01% through -20%

80
%80%

-20.01% through -25%

90
%90%

-25.01% or below

~~100~~
%100%

~~Salary and Bonus in Proportion to Total Compensation~~
~~The following table shows the proportion of salary and bonus to total compensation:~~

Name

Salary
($)

Bonus
($)

Total
Compensation
($)

Salary and Bonus
as a % of
Total Compensation
Terry D. Hildestad

750,000

—

2,558,778

29.3
%
Doran N. Schwartz

300,000

—

718,254

41.8
%
Steven L. Bietz

360,500

—

1,335,091

27.0
%
J. Kent Wells

550,000

—

1,523,801

36.1
%
William E. Schneider

447,400

—

1,247,788

35.9
%
~~Outstanding Equity Awards at Fiscal Year-End 2012~~

Option Awards

Stock Awards

Name
(a)

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
(b)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
(c)

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)

Option
Exercise
Price
($)
(e)

Option
Expiration
Date
(f)

Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
(g)

Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)
(h)

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
(i)

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)
(j)(1)

Terry D. Hildestad

—

—

—

—

—

—

—

111,242(2
)

2,362,780

Doran N. Schwartz

—

—

—

—

—

—

—

21,144(2
)

449,099

Steven L. Bietz

—

—

—

—

—

—

—

32,041(2
)

680,551

J. Kent Wells

—

—

—

—

—

—

—

51,067(2
)

1,084,663

William E. Schneider

—

—

—

—

—

—

—

39,815(2
)

845,671

~~(1)~~
~~Value based on the number of performance shares reflected in column (i) multiplied by $21.24, the year-end closing price for 2012.~~
~~(2)~~
~~Below is a breakdown by year of the plan awards:~~

Named Executive Officer

Award

Shares

End of
Performance
Period

Terry D. Hildestad

2010

4,771

12/31/12

2011

54,243

12/31/13

2012

52,228

12/31/14

Doran N. Schwartz

2010

827

12/31/12

2011

9,872

12/31/13

2012

10,445

12/31/14

Steven L. Bietz

2010

1,336

12/31/12

2011

15,643

12/31/13

2012

15,062

12/31/14

J. Kent Wells

2010

—

12/31/12

2011

—

12/31/13

2012

51,067

12/31/14

William E. Schneider

2010

1,708

12/31/12

2011

19,414

12/31/13

2012

18,693

12/31/14

~~Shares for the 2010 award are shown at the threshold level (10%) based on results for the 2010-2012 performance cycle below threshold.~~
~~Shares for the 2011 award are shown at the target level (100%) based on results for the first two years of the 2011-2013 performance cycle below target.~~
~~Shares for the 2012 award are shown at the target level (100%) based on results for the first year of the 2012-2014 performance cycle below target.~~

34
MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Salary and Bonus in Proportion to Total Compensation
The following table shows the proportion of salary and bonus to total compensation:

Name

Salary
($)

Bonus
($)

Total
Compensation
($)

Salary and Bonus
as a % of
Total Compensation

David L. Goodin

625,000

—

4,047,413

15.4%

Terry D. Hildestad

74,481

—

105,974

70.3%

Doran N. Schwartz

345,000

—

1,047,274

32.9%

J. Kent Wells

570,000

—

3,524,975

16.2%

Jeffrey S. Thiede

367,068

—

1,258,350

29.2%

Paul K. Sandness

344,000

—

1,124,864

30.6%

~~Option Exercises and Stock Vested During 2012~~Outstanding Equity Awards at Fiscal Year-End 2013

Option Awards

Stock Awards

Option Awards

Stock Awards

Name
(a)

Number of Shares Acquired
on Exercise
(#)
(b)

Value Realized
on Exercise
($)
(c)

Number of Shares Acquired
on Vesting
(#)
(d)(1)

Value Realized
on Vesting
($)
(e)(2)

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
(b)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
(c)

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)

Option
Exercise
Price
($)
(e)

Option
Expiration
Date
(f)

Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
(g)

Market
Value of
Shares or
Units of
Stock
That
Have Not
Vested
($)
(h)

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
(i)

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)
(j)(1)

David L. Goodin

—

—

—

—

—

—

—

148,124(2
)

4,525,188

Terry D. Hildestad

—

—

—

—

—

—

—

—

—

—

—

146,206(2
)

4,466,593

Doran N. Schwartz

—

—

—

—

—

—

—

—

—

—

—

64,252(2
)

1,962,899

Steven L. Bietz

—

—

—

—

J. Kent Wells

—

—

43,103

934,042

—

—

—

—

—

—

—

206,196(2
)

6,299,288

William E. Schneider

—

—

—

—

Jeffrey S. Thiede

—

—

—

—

—

—

—

—

—

Paul K. Sandness

—

—

—

—

—

—

—

74,104(2
)

2,263,877

(1)
~~Reflects~~Value based on the ~~portion~~number of ~~Mr. Wells’ additional 2011 annual incentive award that vested on February 16, 2012 and was paid~~performance shares reflected in ~~shares of our common stock determined~~column (i) multiplied by ~~dividing $925,000 by~~$30.55, the ~~stock~~year-end closing price ~~on December 30, 2011, according to the terms of Mr. Wells’ award.~~for 2013.
(2)
Below is a breakdown by year of the plan awards:

Named Executive Officer

Award

Shares

End of
Performance
Period
David L. Goodin

2011

30,376

12/31/13

2012

32,172

12/31/14

2013

85,576

12/31/15
Terry D. Hildestad

2011

108,486

12/31/13

2012

37,720

12/31/14

2013

–

12/31/15
Doran N. Schwartz

2011

19,744

12/31/13

2012

20,890

12/31/14

2013

23,618

12/31/15
J. Kent Wells

2011

–

12/31/13

2012

102,134

12/31/14

2013

104,062

12/31/15
Jeffrey S. Thiede

2011

–

12/31/13

2012

–

12/31/14

2013

–

12/31/15
Paul K. Sandness

2011

24,156

12/31/13

2012

23,258

12/31/14

2013

26,690

12/31/15
Shares for the 2011 award are shown at the maximum level (200%) based on results for the 2011-2013 performance cycle above target.
Shares for the 2012 award are shown at the maximum level (200%) based on results for the first two years of the 2012-2014 performance cycle above target.
Shares for the 2013 award are shown at the maximum level (200%) based on results for the first year of the 2013-2015 performance cycle above target.

~~(2)~~
MDU Resources Group, Inc. Proxy Statement
~~Reflects the value of the portion of Mr. Wells’ additional 2011 annual incentive award that was paid in shares of our common stock based on our closing stock price of $21.67 on February 16, 2012.~~35

Proxy Statement
Pension Benefits for ~~2012~~2013

Name
~~(a)~~

Plan Name
(b)

Number of
Years Credited
Service
(#)
(c)

Present Value
of Accumulated
Benefit
($)
(d)

Payments
During Last
Fiscal Year
($)
(e)

Plan Name

Number of
Years Credited
Service
(#)

Present Value
of Accumulated
Benefit
($)

Payments
During Last
Fiscal Year
($)

(a)

(b)

(c)

(d)

(e)

David L. Goodin

MDU Pension Plan

26

839,516

—

SISP I(1)(3)

10

365,414

—

SISP II(2)(3)

10

570,332

—

SISP II 2012 Upgrade(4)

1

57,247

—

SISP II 2013 Upgrade(4)

0

782,190

—

SISP Excess(5)

26

30,865

—

Terry D. Hildestad

MDU Pension Plan

35

1,662,318

—

MDU Pension Plan

35

1,438,289

95,896

SISP I(1)(3)

10

2,126,747

—

SISP I(1)(3)

10

2,061,898

—

SISP II(2)(3)

10

3,511,576

—

SISP II(2)(3)

10

3,404,499

—

SISP Excess(4)

35

378,943

—

SISP Excess(5)
��

35

192,720

182,410

Doran N. Schwartz

MDU Pension Plan

4

94,002

—

MDU Pension Plan

4

77,776

—

SISP II(2)(3)

5

489,028

—

SISP II(2)(3)

6

400,999

—

Steven L. Bietz

WBI Pension Plan

28

1,154,443

—

SISP II 2013 Upgrade(4)

0

132,714

—

J. Kent Wells(6)

—

—

—

—

Jeffrey S. Thiede(6)

—

—

—

—

Paul K. Sandness

MDU Pension Plan

29

1,383,460

—

SISP I(1)(3)

10

799,197

—

SISP I(1)(3)

10

389,048

—

SISP II(2)(3)

10

768,065

—

SISP II(2)(3)

10

1,088,256

—

SISP Excess(4)

28

103,162

—

SISP Excess(5)

29

153,245

—

J. Kent Wells(5)

—

—

—

—

William E. Schneider

KR Pension Plan

16

800,720

—

SISP I(1)(3)

10

1,479,910

—

SISP II(2)(3)

10

1,748,343

—

(1)
Grandfathered under Section 409A.
(2)
Not grandfathered under Section 409A.
(3)
Years of credited service only affects vesting under SISP I and SISP II. The number of years of credited service in the table reflects the years of vesting service completed in SISP I and SISP II as of December 31, ~~2012,~~2013, rather than total years of service with the company. Ten years of vesting service is required to obtain the full benefit under these plans. The present value of accumulated benefits was calculated by assuming the named executive officer would have ten years of vesting service on the assumed benefit commencement date; therefore, no reduction was made to reflect actual vesting levels.
(4)
Benefit level increases granted under SISP II on or after January 1, 2010 require an additional three years of vesting service for the increase. Mr. Goodin received a benefit increase effective January 1, 2012 and Messrs. Goodin and Schwartz received benefit level increases effective January 1, 2013; the present value of their accumulated benefits was calculated assuming that the additional vesting requirements would be met.
(5)
The number of years of credited service under the SISP excess reflects the years of credited benefit service in the ~~appropriate~~MDU pension plan as of December 31, 2009, when the MDU pension ~~plans were~~plan was frozen, rather than the years of participation in the SISP excess. We reflect years of credited benefit service in the ~~appropriate~~MDU pension plan because the SISP excess provides a benefit that is based on benefits that would have been payable under the MDU pension ~~plans~~plan absent Internal Revenue Code limitations.
~~(5)~~
~~Mr.~~
(6)
Messrs. Wells isand Thiede are not eligible to participate in ~~our~~the MDU pension plan and ~~does~~do not participate in the SISP.
The amounts shown for the pension plan and SISP excess represent the actuarial present values of the executives’ accumulated benefits accrued as of December 31, ~~2012,~~2013, calculated using a ~~3.45%, 3.59%, 3.76%,~~4.32% and ~~3.58%~~4.48% discount rate for the SISP excess ~~MDU pension plan, WBI pension plan,~~ and KRMDU pension plan, respectively, the ~~2013~~2014 IRS Static Mortality Table for post-retirement mortality, and no recognition of future salary increases or pre-retirement mortality. The assumed retirement ~~ages~~age for these benefits was age 60 for Messrs. Goodin, Schwartz, and ~~Bietz.~~Sandness. This is the earliest age at which the executives could begin receiving unreduced benefits. ~~Retirement on December 31, 2012, was assumed for Messrs. Hildestad and Schneider, who were age 63 and 64, respectively, on that date.~~Mr. Hildestad’s benefits reflect his actual retirement date of January 3, 2013. The amounts shown for the SISP I and SISP II were determined using a ~~3.45%~~4.32% discount rate and assume benefits commenced at age 65.
Pension Plan
Messrs. Goodin, Hildestad, Schwartz, and Sandness participate in the MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees, which we refer to as the MDU pension plan. Pension benefits under the MDU pension plan are based on the participant’s average annual salary over the 60 consecutive month period in which the participant received the highest annual salary during the participant’s final 10 years of service. For this purpose, only a participant’s salary is considered; incentives and other forms of compensation are not included. Benefits are determined by multiplying (1) the participant’s years of credited service by (2) the sum of (a) the average annual salary up to the social security integration level times 1.1% and (b) the average annual salary over the social security integration level times 1.45%. The maximum years of service recognized when determining benefits under the pension plan is 35. Pension plan benefits are not reduced for social security benefits.
The MDU ~~Resources Group, Inc.~~ ~~Proxy Statement~~
35

~~Proxy Statement~~

~~Pension Plans~~
Messrs. Hildestad and Schwartz participate in the MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees, which we refer to as the MDU pension plan. Mr. Bietz participates in the Williston Basin Interstate Pipeline Company Pension Plan, which we refer to as the WBI pension plan. Mr. Schneider participates in the Knife River Corporation Salaried Employees’ Pension Plan, which we refer to as the KR pension plan. Pension benefits under the pension plans are based on the participant’s average annual salary over the 60 consecutive month period in which the participant received the highest annual salary during the participant’s final 10 years of service. For this purpose, only a participant’s salary is considered; incentives and other forms of compensation are not included. Benefits are determined by multiplying (1) the participant’s years of credited service by (2) the sum of (a) the average annual salary up to the social security integration level times 1.1% and (b) the average annual salary over the social security integration level times 1.45%. The KR pension plan uses the same formula except that 1.2% and 1.6% are used instead of 1.1% and 1.45%. The maximum years of service recognized when determining benefits under the pension plans is 35. Pension plan benefits are not reduced for social security benefits.
~~Each of the pension plans~~ was amended to cease benefit accruals as of December 31, 2009, meaning the normal retirement benefit will not change. The years of credited service in the table reflect the named executive officers’ years of credited service as of December 31, 2009.
36
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
To receive unreduced retirement benefits under the MDU ~~pension plan and the WBI~~ pension plan, participants must either remain employed until age 60 or elect to defer commencement of benefits until age 60. ~~Under the KR pension plan, participants must remain employed until age 62 or elect to defer commencement of benefits until age 62 to receive unreduced benefits.~~ Mr. Hildestad was eligible for unreduced retirement benefits under the MDU pension ~~plan, and Mr. Schneider was eligible for unreduced retirement benefits under the KR pension plan on December 31, 2012.~~plan. Participants whose employment terminates between the ages of 55 and 60, with 5 years of service under the MDU ~~pension plan and the WBI~~ pension plan, are eligible for early retirement benefits. Early retirement benefits are determined by reducing the normal retirement benefit by 0.25% per month for each month before age ~~60 in the MDU pension plan and the WBI pension plan.~~60. If a participant’s employment terminates before age 55, the same reduction applies for each month the termination occurs before age 62, with the reduction capped at 21%.
Benefits for single participants under the MDU pension ~~plans~~plan are paid as straight life annuities, and benefits for married participants are paid as actuarially reduced annuities with a survivor benefit for spouses, unless participants choose otherwise. Participants hired before January 1, 2004, who terminate employment before age 55, may elect to receive their benefits in a lump sum. Mr. ~~Bietz~~Goodin would have been eligible for a lump sum if he had retired on December 31, ~~2012.~~2013.
The Internal Revenue Code limits the amounts ~~that may be~~ paid under the MDU pension ~~plans~~plan and the amount of compensation ~~that may be~~ recognized when determining benefits. In 2009 when the MDU pension ~~plans were~~plan was frozen, the maximum annual benefit payable under the pension ~~plans~~plan was $195,000 and the maximum amount of compensation ~~that could be~~ recognized when determining benefits was $245,000.
Supplemental Income Security Plan
We also offer select key managers and executives benefits under our defined benefit nonqualified retirement plan, which we refer to as the Supplemental Income Security Plan or SISP. Messrs. Goodin, Hildestad, Schwartz, and Sandness participate in the SISP. Benefits under the SISP consist of:
We also offer key managers and executives, including our named executive officers, except Mr. Wells, benefits under our nonqualified retirement plan, which we refer to as the Supplemental Income Security Plan or SISP. Benefits under the SISP consist of:

•
a supplemental retirement benefit intended to augment the retirement income provided under the pension plans – we refer to this benefit as the regular SISP benefit

•
an excess retirement benefit relating to Internal Revenue Code limitations on retirement benefits provided under the pension plans – we refer to this benefit as the SISP excess benefit, and

•
death benefits – we refer to these benefits as the SISP death benefit.
SISP benefits are forfeited if the participant’s employment is terminated for cause.
Regular SISP Benefits and Death Benefits
Regular SISP benefits and death benefits are determined by reference to one of two schedules attached to the SISP – the original schedule or the amended schedule. Our compensation committee, after receiving recommendations from our chief executive officer, determines the level at which participants are placed in the schedules. A participant’s placement is generally, but not always, determined by reference to the participant’s annual base salary. Benefit levels in the amended schedule, which became effective on January 1, 2010, are 20% lower than the benefit levels in the original schedule. The amended schedule applies to new participants and participants who receive a benefit level increase on or after January 1, 2010. ~~None~~Two of the named executive officers, ~~have~~Messrs. Goodin and Schwartz, received a benefit level increase ~~since the amended schedule became effective.~~effective January 1, 2013, which requires three years of vesting.
36
~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~
Participants can elect to receive (1) the regular SISP benefit only, (2) the SISP death benefit only, or (3) a combination of both. Regardless of the participant’s election, if the participant dies before the regular SISP benefit would commence, only the SISP death benefit is provided. If the participant elects to receive both a regular SISP benefit and a SISP death benefit, each of the benefits is reduced proportionately.
The regular SISP benefits reflected in the table above are based on the assumption that the participant elects to receive only the regular SISP benefit. The present values of the SISP death benefits that would be provided if the named executive officers had died on December 31, ~~2012,~~2013, prior to the commencement of regular SISP benefits, are reflected in the table that appears in the section entitled “Potential Payments upon Termination or Change of Control.”
Regular SISP benefits that were vested as of December 31, 2004, and were grandfathered under Section 409A of the Internal Revenue Code remain subject to SISP provisions then in effect, which we refer to as SISP I benefits. Regular SISP benefits that are subject to Section 409A of the Internal Revenue Code, which we refer to as SISP II benefits, are governed by amended provisions intended to comply with Section 409A. Participants generally have more discretion with respect to the distributions of their SISP I benefits.
The time and manner in which the regular SISP benefits are paid depend on a variety of factors, including the time and form of benefit elected by the participant and whether the benefits are SISP I or SISP II benefits. Unless the participant elects otherwise, the SISP I benefits are paid over 180 months, with benefits commencing when the participant attains age 65 or, if later, when the participant retires.
MDU Resources Group, Inc. Proxy Statement
37

Proxy Statement
The SISP II benefits commence when the participant attains age 65 or, if later, when the participant retires, subject to a six-month delay if the participant is subject to the provisions of Section 409A of the Internal Revenue Code that require delayed commencement of these types of retirement benefits. The SISP II benefits are paid over 180 months or, if commencement of payments is delayed for six months, 173 months. If the commencement of benefits is delayed for six months, the first payment includes the payments that would have been paid during the six-month period plus interest equal to one-half of the annual prime interest rate on the participant’s last date of employment. If the participant dies after the regular SISP benefits have begun but before receipt of all of the regular SISP benefits, the remaining payments are made to the participant’s designated beneficiary.
Rather than receiving their regular SISP I benefits in equal monthly installments over 15 years commencing at age 65, participants can elect a different form and time of commencement of their SISP I benefits. Participants can elect to defer commencement of the regular SISP I benefits. If this is elected, the participant retains the right to receive a monthly SISP death benefit if death occurs prior to the commencement of the regular SISP I benefit.
Participants also can elect to receive their SISP I benefits in one of three actuarially equivalent forms – a life annuity, 100% joint and survivor annuity, or a joint and two-thirds joint and survivor annuity, provided that the cost of providing these actuarial equivalent forms of benefits does not exceed the cost of providing the normal form of benefit. Neither the election to receive an actuarially equivalent benefit nor the administrator’s right to pay the regular SISP benefit in the form of an actuarially equivalent lump sum are available with respect to SISP II benefits.
To promote retention, the regular SISP benefits are subject to the following 10-year vesting schedule:

•
0% vesting for less than 3 years of participation

•
20% vesting for 3 years of participation

•
40% vesting for 4 years of participation and

•
an additional 10% vesting for each additional year of participation up to 100% vesting for 10 years of participation.
There is an additional vesting requirement on benefit level increases for the regular SISP benefit granted on or after January 1, 2010. The requirement applies only to the increased benefit level. The increased benefit vests after the later of three additional years of participation in the SISP or the end of the regular vesting schedule described above. The additional three-year vesting requirement for benefit level increases is pro-rated for participants who are officers, attain age 65, and, pursuant to the company’s bylaws, are required to retire prior to the end of the additional vesting period as follows:

•
33% of the increase vests for participants required to retire at least one year but less than two years after the increase is granted and

•
66% of the increase vests for participants required to retire at least two years but less than three years after the increase is granted.

1
~~MDU Resources Group, Inc.~~~~Proxy Statement~~
37

~~Proxy Statement~~
The benefit level increases of participants who attain age 65 and are required to retire pursuant to the company’s bylaws will be further reduced to the extent the participants are not fully vested in their regular SISP benefit under the 10-year vesting schedule described above. The additional vesting period associated with a benefit level increase may be waived by the compensation committee.
SISP death benefits become fully vested if the participant dies while actively employed. Otherwise, the SISP death benefits are subject to the same vesting schedules as the regular SISP benefits.
The SISP also provides that if a participant becomes totally disabled, the participant will continue to receive credit for up to two additional years under the SISP as long as the participant is totally disabled during such time. Since the named executive officers other than Mr. Goodin, in his upgrade, and Mr. Schwartz are fully vested in their SISP benefits, this would not result in any incremental benefit for the named executive officers other than ~~Mr.~~Messrs. Goodin and Schwartz. The present value of these two additional years of service for ~~Mr.~~Messrs. Goodin and Schwartz is reflected in the table in “Potential Payments upon Termination or Change of Control” below.
SISP Excess Benefits
SISP excess benefits are equal to the difference between (1) the monthly retirement benefits that would have been payable to the participant under the pension plans absent the limitations under the Internal Revenue Code and (2) the actual benefits payable to the participant under the pension plans. Participants are only eligible for the SISP excess benefits if (1) the participant is fully vested under the pension plan, (2) the participant’s employment terminates prior to age 65, and (3) benefits under the pension plan are reduced due to limitations under the Internal Revenue Code on plan compensation. Effective January 1, 2005, participants who were not then vested in the SISP excess benefits were also required to remain actively employed by the company until age 60. In 2009, the plan was amended to
38
MDU Resources Group, Inc. Proxy Statement

~~SISP Excess Benefits~~Proxy Statement
SISP excess benefits are equal to the difference between (1) the monthly retirement benefits that would have been payable to the participant under the pension plans absent the limitations under the Internal Revenue Code and (2) the actual benefits payable to the participant under the pension plans. Participants are only eligible
limit eligibility for the SISP excess benefits if (1) the participant is fully vested under the pension plan, (2) the participant’s employment terminates prior to age 65, and (3) benefits under the pension plan are reduced due to limitations under the Internal Revenue Code on plan compensation. Effective January 1, 2005, participants who were not then vested in the SISP excess benefits were also required to remain actively employed by the company until age 60. In 2009, the SISP excess benefit to current SISP participants (1) who were already vested in the SISP excess benefit or (2) who would become vested in the SISP excess benefits if they remain employed with the company until age 60. The plan was further amended to freeze the SISP excess benefits to a maximum of the benefit level payable based on the participant’s years of service and compensation level as of December 31, 2009. Mr. Sandness would be entitled to the SISP excess benefit if he was amended to limit eligibility for the SISP excess benefit to current SISP participants (1) who were already vested in the SISP excess benefit or (2) who would become vested in the SISP excess benefits if they remain employed with the company until age 60. The plan was further amended to freeze the SISP excess benefits to a maximum of the benefit level payable based on the participant’s years of service and compensation level as of December 31, 2009. Messrs. Hildestad, Bietz, and Schneider would be entitled to the SISP excess benefit if they were to terminate employment prior to age 65. Mr. Goodin must remain employed until age 60 to become entitled to his SISP excess benefit. Mr. Hildestad’s benefits reflect his actual payment during 2013 as his retirement commenced before attainment of age 65 and the present value of his future payments that continue until he reaches age 65. Messrs. Schwartz, ~~and~~ Wells, and Thiede are not eligible for this benefit.
Benefits generally commence six months after the participant’s employment terminates and continue to age 65 or until the death of the participant, if prior to age 65. If a participant who dies prior to age 65 elected a joint and survivor benefit, the survivor’s SISP excess benefit is paid until the date the participant would have attained age 65.
Nonqualified Deferred Compensation for ~~2012~~2013

Name
~~(a)~~

Executive
Contributions in
Last FY
($)
(b)

Registrant
Contributions in
Last FY
($)
(c)

Earnings in
Aggregate
Last FY
($)
(d)

Aggregate
Withdrawals/
Distributions
($)
(e)

Aggregate
Balance at
Last FYE
($)
(f)

Executive
Contributions in
Last FY
($)

Registrant
Contributions in
Last FY
($)

Aggregate
Earnings in
Last FY
($)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance at
Last FYE
($)

(a)

(b)

(c)

(d)

(e)

(f)

David L. Goodin

—

—

6

1,526

—

Terry D. Hildestad

—

—

53,105

—

1,001,633

—

—

46,850

—

1,048,483

Doran N. Schwartz

—

—

—

—

—

—

—

—

—

—

Steven L. Bietz

—

—

—

—

—

J. Kent Wells

—

—

—

—

—

—

—

—

—

—

William E. Schneider

—

—

87,334

—

1,647,225
(1)

Jeffrey S. Thiede

—

33,000

5,751

—

38,751
(1)
Paul K. Sandness

—

—

—

—

—

(1)
Includes ~~$392,000~~$33,000 which was ~~reported in~~awarded to Jeffrey S. Thiede under the ~~Summary Compensation Table for 2006 in column (g) and $37,805~~Nonqualified Defined Contribution Plan which is reported for ~~2010~~2013 in column ~~(g)~~(i) of the Summary Compensation Table in this proxy statement.
Deferral of Annual Incentive Compensation
Participants in the executive incentive compensation plans may elect to defer up to 100% of their annual incentive awards. Deferred amounts accrue interest at a rate determined annually by the compensation committee. The interest rate in effect for ~~2012~~2013 was ~~5.46%~~4.58% or the “Moody’s Rate,” which is the average of (i) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “A” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12 and (ii) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “BBB” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12. The deferred amount will be paid in accordance with the participant’s election, following termination of employment or beginning in the fifth year following the year the award was granted. The amounts will be paid in accordance with the participant’s election in a lump sum or in monthly installments not to exceed 120 months. In the event of a change of control, all amounts become immediately payable.
38
~~MDU Resources Group, Inc.~~~~Proxy Statement~~

~~Proxy Statement~~
A change of control is defined as:

•
an acquisition during a 12-month period of 30% or more of the total voting power of our stock

•
an acquisition of our stock that, together with stock already held by the acquirer, constitutes more than 50% of the total fair market value or total voting power of our stock

•
replacement of a majority of the members of our board of directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of our board of directors or

•
acquisition of our assets having a gross fair market value at least equal to 40% of the total gross fair market value of all of our assets.

Nonqualified Defined Contribution Plan
The company adopted the Nonqualified Defined Contribution Plan, effective January 1, 2012, to provide deferred compensation for a select group of management or highly compensated employees who do not participate in the SISP. The compensation committee determines the amount of employer contributions under the Nonqualified Defined Contribution Plan, which are credited to plan accounts and not funded. After satisfying a four-year vesting requirement for each contribution, the contributions and investment earnings will be distributed to the executive in a lump sum upon separation from service with the company or in annual installments commencing upon the later of (i) separation from service and (ii) age 65. Plan benefits become fully vested if the participant dies while actively employed. Benefits are forfeited if the participant’s employment is terminated for cause.

MDU Resources Group, Inc. Proxy Statement
39

Proxy Statement
Potential Payments upon Termination or Change of Control
The following tables show the payments and benefits our named executive officers would receive in connection with a variety of employment termination scenarios and upon a change of control. For the named executive officers other than Mr. Hildestad, the information assumes the terminations and the change of control occurred on December 31, ~~2012.~~2013. For Mr. Hildestad, the information relates to his actual retirement on January 3, 2013 and assumes that a change of control occurred on December 31, 2013. All of the payments and benefits described below would be provided by the company or its subsidiaries.
The tables exclude compensation and benefits provided under plans or arrangements that do not discriminate in favor of the named executive officers and that are generally available to all salaried employees, such as benefits under our qualified defined benefit pension plan (for employees hired before 2006), accrued vacation pay, continuation of health care benefits, and life insurance benefits. The tables ~~also~~include amounts under the Nonqualified Defined Contribution Plan, but do not include the named executive officers’ ~~benefits under our nonqualified~~ deferred ~~compensation plans, which are reported in the Nonqualified Deferred Compensation for 2012 table.~~annual incentive compensation. See the Pension Benefits for ~~2012~~2013 table and the Nonqualified Deferred Compensation for ~~2012~~2013 table, and accompanying narratives, for a description of the named executive officers’ accumulated benefits under our qualified defined benefit pension plans, the Nonqualified Defined Contribution Plan, and ~~our nonqualified~~their deferred ~~compensation plans.~~annual incentive compensation.
The calculation of the present value of excess SISP benefits our named executive officers would be entitled to upon termination of employment under the SISP was computed based on calculations assuming an age rounded to the nearest whole year of age. Actual payments may differ. The terms of the excess SISP benefit are described following the Pension Benefits for ~~2012~~2013 table.
We provide disability benefits to some of our salaried employees equal to 60% of their base salary, subject to a cap on the amount of base salary taken into account when calculating benefits. For officers, the limit on base salary is $200,000. For other salaried employees, the limit is $100,000. For all salaried employees, disability payments continue until age 65 if disability occurs at or before age 60 and for 5 years if disability occurs between the ages of 60 and 65. Disability benefits are reduced for amounts paid as retirement benefits. The amounts in the tables reflect the present value of the disability benefits attributable to the additional $100,000 of base salary recognized for executives under our disability program, subject to the 60% limitation, after reduction for amounts that would be paid as retirement benefits. As the tables reflect, the reduction for amounts paid as retirement benefits would eliminate disability benefits assuming a termination of employment on December 31, ~~2012~~2013 for ~~Messrs. Hildestad, Bietz, and Schneider.~~Mr. Sandness.
Upon a change of control, share-based awards granted under our Long-Term Performance-Based Incentive Plan vest and non-share-based awards are paid in cash. All performance share awards for Messrs. Goodin, Hildestad, Schwartz, ~~Bietz,~~ Wells, and ~~Schneider~~Sandness and the annual incentives for Messrs. ~~Hildestad, Bietz,~~Goodin and Wells, ~~and Schneider,~~ which were awarded under the Long-Term Performance-Based Incentive Plan, would vest at their target levels. For this purpose, the term “change of control” is defined as:

•
the acquisition by an individual, entity, or group of 20% or more of our outstanding common stock

•
a change in a majority of our board of directors since April 22, 1997, without the approval of a majority of the board members as of April 22, 1997, or whose election was approved by such board members

•
consummation of a merger or similar transaction or sale of all or substantially all of our assets, unless our stockholders immediately prior to the transaction beneficially own more than 60% of the outstanding common stock and voting power of the resulting corporation in substantially the same proportions as before the merger, no person owns 20% or more of the resulting corporation’s outstanding common stock or voting power except for any such ownership that existed before the merger and at least a majority of the board of the resulting corporation is comprised of our directors or

•
stockholder approval of our liquidation or dissolution.

~~MDU Resources Group, Inc.~~~~Proxy Statement~~
39

~~Proxy Statement~~
Performance share awards will be forfeited if the participant’s employment terminates for any reason before the participant has reached age 55 and completed 10 years of service. Performance shares and related dividend equivalents for those participants whose employment is terminated other than for cause after the participant has reached age 55 and completed 10 years of service will be prorated as follows:

•
if the termination of employment occurs during the first year of the performance period, the shares are forfeited

•
if the termination of employment occurs during the second year of the performance period, the executive receives a prorated portion of any performance shares earned based on the number of months employed during the performance period and

•
if the termination of employment occurs during the third year of the performance period, the executive receives the full amount of any performance shares earned.

40
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
As of December 31, ~~2012,~~2013, Messrs. Goodin, Schwartz, ~~Bietz,~~ and Wells had not satisfied this requirement. Accordingly, if a December 31, ~~2012~~2013 termination other than for cause without a change of control is assumed, the named executive officers’ ~~2012-2014~~2013-2015 performance share awards would be ~~forfeited,~~forfeited; any amounts earned under the 2012-2014 performance share award for Mr. Sandness would be reduced by one-third and such awards for Messrs. Goodin, Schwartz, and Wells would be forfeited; and any amounts earned under the 2011-2013 performance share ~~awards for Messrs. Hildestad and Schneider would be reduced by one-third and such~~ award for ~~Messrs. Schwartz and Bietz would be forfeited, and any amounts earned under the 2010-2012 performance share awards for Messrs. Hildestad and Schneider~~Mr. Sandness would not be reduced and the ~~award~~awards for Messrs. ~~Schwartz~~Goodin and ~~Bietz~~Schwartz would be forfeited. Mr. Wells had no 2011-2013 performance share awards, and Mr. Thiede had no 2013-2015, 2012-2014, or ~~2010-2012~~2011-2013 performance share awards. The number of performance shares earned following a termination depends on actual performance through the full performance period. As actual performance for the ~~2010-2012~~2011-2013 performance share awards has been determined, the amounts for these awards in the event of a termination without a change of control were based on actual performance, which resulted in vesting of 0%193% of the target award. For the ~~2011-2013~~2012-2014 performance share awards, because we do not know what actual performance through the entire performance period will be, we have assumed target performance will be achieved and, therefore, show two-thirds of the target award. No amounts are shown for the ~~2012-2014~~2013-2015 performance share awards because such awards would be forfeited. Although vesting would only occur after completion of the performance period, the amounts shown in the tables were not reduced to reflect the present value of the performance shares that could vest. Dividend equivalents attributable to earned performance shares would also be paid. Dividend equivalents accrued through December 31, ~~2012,~~2013, are included in the amounts shown.
The value of the vesting of performance shares shown in the tables was determined by multiplying the number of performance shares that would vest due to termination or a change of control by the closing price of our stock on December 31, ~~2012.~~2013.
The compensation committee may consider providing severance benefits on a case-by-case basis for employment terminations. The compensation committee adopted a checklist of factors in February 2005 to consider when determining whether any such severance benefits should be paid. The tables do not reflect any such severance benefits, as these benefits are made in the discretion of the committee on a case-by-case basis and it is not possible to estimate the severance benefits, if any, that would be paid.

40
MDU Resources Group, Inc.Proxy Statement
41

Proxy Statement

~~Proxy Statement~~
~~Terry D. Hildestad~~

David L. Goodin

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)
Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)
Compensation:

Short-term Incentive(1)

750,000

750,000

937,500

937,500
2010-2012 Performance Shares

1,107,087

1,107,087

2011-2013 Performance Shares

816,176

816,176

816,176

816,176

1,224,265

1,224,265

494,749

494,749
2012-2014 Performance Shares

1,144,577

1,144,577

513,465

513,465
2013-2015 Performance Shares

1,336,911

1,336,911
Benefits and Perquisites:

Regular SISP(2)

5,709,419

5,709,419

5,709,419

5,709,419

930,586

930,586

987,517

930,586

Excess SISP(3)

378,944

378,944

378,944

378,944

SISP Death Benefits(4)

12,024,426

SISP Death Benefits(3)

6,118,589

Disability Benefits(4)

107,847

Total

6,904,539

6,904,539

12,840,602

6,904,539

10,314,292

4,225,929

930,586

930,586

6,118,589

1,095,364

4,213,211

3,282,625

(1)
Represents the target ~~2012~~2013 annual incentive, which would be deemed earned upon change of control under the Long-Term Performance-Based Incentive Plan.
(2)
Represents the present value of Mr. ~~Hildestad’s~~Goodin’s vested regular SISP benefit as of December 31, ~~2012,~~2013, which was ~~$42,710~~$12,145 per month for 15 years, commencing at age 65. Present value was determined using a ~~3.45%~~4.32% discount rate. The terms of the regular SISP benefit are described following the Pension Benefits for 2013 table. The amount payable for a disability reflects a credit for two additional years of vesting, which would result in full vesting of the 2012 ~~table.~~SISP upgrade.
(3)
Represents the present value of all excess SISP benefits Mr. Hildestad would be entitled to upon termination of employment under the SISP. Present value was determined using a 3.45% discount rate. The terms of the excess SISP benefit are described following the Pension Benefits for 2012 table.
~~(4)~~
Represents the present value of 180 monthly payments of ~~$85,420~~$46,080 per month, which would be paid as a SISP death benefit under the SISP. Present value was determined using a ~~3.45%~~4.32% discount rate. The terms of the SISP death benefit are described following the Pension Benefits for ~~2012~~2013 table.
(4)
Represents the present value of the disability benefit after reduction for amounts that would be paid as retirement benefits. Present value was determined using a 4.48% discount rate.

Terry D. Hildestad

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($) (1)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
($)
Compensation:

2011-2013 Performance Shares

3,410,244

1,766,966
2012-2014 Performance Shares

602,011

602,011
2013-2015 Performance Shares

Total

4,012,255

2,368,977
(1)
Mr. Hildestad retired on January 3, 2013. The information in this table relates to his actual retirement on January 3, 2013, and assumes that a change of control occurred on December 31, 2013. The amount shown for the 2011-2013 Performance Shares is based on actual performance, resulting in payment of 193% of the target award. The amount shown for the 2012-2014 Performance Shares is the target award, prorated based on the number of months Mr. Hildestad worked during the performance period. His termination qualified as normal retirement under our qualified pension plan and our SISP. Mr. Hildestad also had an accumulated benefit under our Nonqualified Deferred Compensation Plan. These plans and Mr. Hildestad’s benefits under them are described in the Pension Benefits for 2013 table and the Nonqualified Deferred Compensation for 2013 table and accompanying narratives.

42
MDU Resources Group, Inc.Proxy Statement
41

Proxy Statement

~~Proxy Statement~~
~~Doran N. Schwartz~~

Doran N. Schwartz

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)
Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)
Compensation:

2010-2012 Performance Shares

191,882

191,882

2011-2013 Performance Shares

222,811

222,811

321,580

321,580
2012-2014 Performance Shares

228,902

228,902

333,404

333,404
2013-2015 Performance Shares

368,972

368,972
Benefits and Perquisites:

Regular SISP

244,273
(1)

244,273
(1)

341,982
(2)

244,273
(1)

240,266
(1)
240,266
(1)

320,355
(2)
240,266
(1)

SISP Death Benefits(3)

2,055,217

2,580,217

Disability Benefits(4)

855,522

761,399

Total

244,273

244,273

2,055,217

1,197,504

887,868

643,595

240,266

240,266

2,580,217

1,081,754

1,264,222

1,023,956

(1)
Represents the present value of Mr. Schwartz’s vested regular SISP benefit as of December 31, ~~2012,~~2013, which was ~~$3,650~~$4,380 per month for 15 years, commencing at age 65. Present value was determined using a ~~3.45%~~4.32% discount rate. The terms of the regular SISP benefit are described following the Pension Benefits for ~~2012~~2013 table.
(2)
Represents the present value of Mr. Schwartz’s vested SISP benefit described in footnote 1, adjusted to reflect the increase in the present value of his regular SISP benefit that would result from an additional two years of vesting under the SISP. Present value was determined using a ~~3.45%~~4.32% discount rate.
(3)
Represents the present value of 180 monthly payments of ~~$14,600~~$19,432 per month, which would be paid as a SISP death benefit under the SISP. Present value was determined using a ~~3.45%~~4.32% discount rate. The terms of the SISP death benefit are described following the Pension Benefits for ~~2012~~2013 table.
(4)
Represents the present value of the disability benefit after reduction for amounts that would be paid as retirement benefits. Present value was determined using a ~~3.59%~~4.48% discount rate.

J. Kent Wells

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)
Compensation:

Short-term Incentive(1)

712,500

712,500
2012-2014 Performance Shares

1,630,059

1,630,059
2013-2015 Performance Shares

1,625,709

1,625,709
Benefits and Perquisites:

Disability Benefits (2)

399,567

Total

399,567

3,968,268

3,968,268
(1)
Represents the target 2013 annual incentive, which would be deemed earned upon change of control under the Long-Term Performance-Based Incentive Plan.
(2)
Represents the present value of the disability benefit. Present value was determined using the 4.32% discount rate applied for purposes of the SISP calculations. Though Mr. Wells is not a participant in the SISP, this rate is considered reasonable for purposes of this calculation as it would be applied if Mr. Wells were to become a SISP participant.

42
MDU Resources Group, Inc. Proxy Statement
43

Proxy Statement

~~Steven L. Bietz~~Jeffrey S. Thiede

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)
Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Compensation:

Short-term Incentive(1)

234,325

234,325

2010-2012 Performance Shares

309,972

309,972

2011-2013 Performance Shares

353,063

353,063

2012-2014 Performance Shares

330,084

330,084

Benefits and Perquisites:

Regular SISP(2)

1,556,929

1,556,929

1,556,929

1,556,929

Excess SISP(3)

180,597

180,597

180,597

180,597

SISP Death Benefits(4)

4,535,554

Total

1,737,526

1,737,526

4,535,554

1,737,526

2,964,970

1,227,444

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Compensation:

Benefits and Perquisites:

Nonqualified Defined Contribution

Plan Death Benefit(1)

38,751

Disability Benefits(2)

598,158

Total

38,751

598,158

(1)
Represents the ~~target 2012 annual incentive, which would be deemed earned upon change of control under the Long-Term Performance-Based Incentive Plan.~~
~~(2)~~
~~Represents the present~~ value of Mr. ~~Bietz’s vested regular SISP benefit as of~~Thiede’s unvested Nonqualified Defined Contribution Plan account at December 31, 2012, which was $16,110 per month for 15 years, commencing at age 65. Present value was determined using a 3.45% discount rate. The terms of the regular SISP benefit are described following the Pension Benefits for 2012 table.
~~(3)~~
Represents the present value of all excess SISP benefits Mr. Bietz would be entitled to upon termination of employment under the SISP. Present value was determined using a 3.45% discount rate. The terms of the excess SISP benefit are described following the Pension Benefits for 2012 table.
~~(4)~~
~~Represents the present value of 180 monthly payments of $32,220 per month,~~2013, which would be paid ~~as a SISP death benefit under the SISP. Present value was determined using a 3.45% discount rate. The terms of the SISP death benefit are described following the Pension Benefits for 2012 table.~~

~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
43

~~Proxy Statement~~
~~J. Kent Wells~~

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Compensation:

Short-term Incentive(1)

687,500

687,500

2012-2014 Performance Shares

1,119,133

1,119,133

Benefits and Perquisites:

Disability Benefits (2)

452,506

Total

452,506

1,806,633

1,806,633

~~(1)~~
~~Represents the target 2012 annual incentive, which would be deemed earned~~ upon ~~change of control under the Long-Term Performance-Based Incentive Plan.~~death.

(2)
Represents the present value of the disability benefit. Present value was determined using the 4.32% discount rate applied for purposes of the SISP calculations. Though Mr. Thiede is not a ~~3.76% discount rate.~~participant in the SISP, this rate is considered reasonable for purposes of this calculation as it would be applied if Mr. Thiede were to become a SISP participant.

Paul K. Sandness

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Compensation:

2011-2013 Performance Shares

759,356

759,356

759,356

759,356

393,441

393,441

2012-2014 Performance Shares

247,476

247,476

247,476

247,476

371,198

371,198

2013-2015 Performance Shares

416,965

416,965

Benefits and Perquisites:

Regular SISP(1)

1,437,027

1,437,027

1,437,027

1,437,027

Excess SISP(2)

150,947

150,947

150,947

150,947

SISP Death Benefits(3)

3,630,256

Total

2,594,806

2,594,806

4,637,088

2,594,806

2,769,578

1,181,604

(1)
Represents the present value of Mr. Sandness’ vested regular SISP benefit as of December 31, 2013, which was $13,670 per month for 15 years, commencing at age 65. Present value was determined using a 4.32% discount rate. The terms of the regular SISP benefit are described following the Pension Benefits for 2013 table.

(2)
The present value of all excess SISP benefits Mr. Sandness would be entitled to upon termination of employment under the SISP was computed based on calculations of ages rounded to the nearest whole age. Actual payments may differ. The terms of the excess SISP benefit are described following the Pension Benefits for 2013 table.

(3)
Represents the present value of 180 monthly payments of $27,340 per month, which would be paid as a SISP death benefit under the SISP. Present value was determined using a 4.32% discount rate. The terms of the SISP death benefit are described following the Pension Benefits for 2013 table.

44
MDU Resources Group, Inc. Proxy Statement

Proxy Statement

~~William E. Schneider~~Director Compensation for 2013

Executive Benefits and
Payments Upon
Termination or
Change of Control

Voluntary
Termination
($)

Not for
Cause
Termination
($)

For Cause
Termination
($)

Death
($)

Disability
($)

Change of
Control
(With
Termination)
($)

Change of
Control
(Without
Termination)
($)

Compensation:

Short-term Incentive(1)

290,810

290,810

2010-2012 Performance Shares

396,249

396,249

2011-2013 Performance Shares

292,124

292,124

292,124

292,124

438,174

438,174

2012-2014 Performance Shares

409,657

409,657

Benefits and Perquisites:

Regular SISP(2)

3,161,624

3,161,624

3,161,624

3,161,624

SISP Death Benefits(3)

6,433,110

Total

3,453,748

3,453,748

6,725,234

3,453,748

4,696,514

1,534,890

Name
(a)

Fees
Earned
or Paid
in Cash
($)
(b)

Stock
Awards
($)
(c)

Option
Awards
($)
(d)

Non-Equity
Incentive Plan
Compensation
($)
(e)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(f)

All Other
Compensation
($)
(g)(1)

Total
($)
(h)

Thomas Everist

65,000

110,000
(2)

—

—

—

156

175,156

Karen B. Fagg

65,000

110,000
(2)

—

—

—

656

175,656

Mark A. Hellerstein (3)

22,917

45,833
(4)

—

—

—

65

68,815

A. Bart Holaday

55,000
(5)

110,000
(2)

—

—

—

156

165,156

Dennis W. Johnson

70,000

110,000
(2)

—

—

—

156

180,156

Thomas C. Knudson

55,000

110,000
(2)

—

—

—

156

165,156

Richard H. Lewis (6)

18,333

36,667
(4)

—

—

—

481,572
(7)

536,572

William E. McCracken (3)

22,917

45,833
(4)

—

—

—

65

68,815

Patricia L. Moss

55,000

110,000
(2)

—

—

—

156

165,156

Harry J. Pearce

138,750

110,000
(2)

—

—

—

156

248,906

John K. Wilson

55,000
(8)

110,000
(2)

—

—

—

156

165,156

(1)
~~Represents the target 2012 annual incentive, which would be deemed earned upon change~~Group life insurance premium and a matching charitable contribution of ~~control under the Long-Term Performance-Based Incentive Plan.~~$500 for Ms. Fagg.

(2)
Represents the present value of Mr. Schneider’s vested regular SISP benefit as of December 31, 2012, which was $22,850 per month for 15 years, commencing at age 65. Present value was determined using a 3.45% discount rate. The terms of the regular SISP benefit are described following the Pension Benefits for 2012 table.
~~(3)~~
Represents the present value of 180 monthly payments of $45,700 per month, which would be paid as a SISP death benefit under the SISP. Present value was determined using a 3.45% discount rate. The terms of the SISP death benefit are described following the Pension Benefits for 2012 table.

~~MDU Resources Group, Inc~~~~. Proxy Statement~~
45

~~Proxy Statement~~
~~Director Compensation for 2012~~

Name
(a)

Fees
Earned
or Paid
in Cash
($)
(b)

Stock
Awards
($)
(c)(1)

Option
Awards
($)
(d)

Non-Equity
Incentive Plan
Compensation
($)
(e)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(f)

All Other
Compensation
($)
(g)(2)

Total
($)
(h)

Thomas Everist

65,000

110,000

—

—

—

174

175,174

Karen B. Fagg

65,000

110,000

—

—

—

174

175,174

A. Bart Holaday

55,000
(3)

110,000

—

—

—

174

165,174

Dennis W. Johnson

70,000

110,000

—

—

—

174

180,174

Thomas C. Knudson

55,000

110,000

—

—

—

674

165,674

Richard H. Lewis

55,000

110,000

—

—

—

174

165,174

Patricia L. Moss

55,000
(4)

110,000

—

—

—

174

165,174

Harry J. Pearce

130,000

110,000

—

—

—

174

240,174

John K. Wilson

55,000
(5)

110,000

—

—

—

174

165,174

~~(1)~~
~~This column reflects~~Reflects the aggregate grant date fair value of ~~5,467~~3,603 shares of MDU Resources Group, Inc. stock purchased for our non-employee directors measured in accordance with Financial Accounting Standards Board generally accepted accounting principles for ~~stock based~~stock-based compensation in FASB Accounting Standards Codification Topic 718. The grant date fair value is based on the purchase price of our common stock on the grant date on November ~~19, 2012,~~20, 2013, which was ~~$20.118.~~$30.528. The ~~$14.89~~$7.62 in cash paid to each director for the fractional shares is included in the amounts reported in column (c) to this table.
~~(2)~~
~~Group life insurance premium of $174 and a matching charitable contribution of $500 for Mr. Knudson.~~
(3)
Elected a Director effective August 1, 2013.
(4)
Reflects the aggregate grant date fair value of MDU Resources Group, Inc. stock purchased for our non-employee directors measured in accordance with Financial Accounting Standards Board generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. The grant date fair value is based on the purchase price of our common stock on the grant date on November 20, 2013, which was $30.528. The stock payment is pro-rated for directors who do not serve the entire calendar year. There were 1,501 shares purchased for Messrs. Hellerstein and McCracken with $10.80 in cash paid to each for the fractional shares, and for Mr. Lewis there were 1,201 shares purchased with $2.54 in cash paid to Mr. Lewis for the fractional share.
(5)
Includes ~~$14,999~~$54,977 that Mr. Holaday received in our common stock in lieu of cash.
~~(4)~~
(6)
Mr. Lewis served on the board until April 23, 2013.
(7)
Comprised of a group life insurance premium of $52, payments of $18,961 during 2013 from Mr. Lewis’ deferred compensation and the value of Mr. Lewis’ deferred compensation at December 31, 2013, which is payable over five years in monthly installments.
(8)
Includes ~~$27,481 that Ms. Moss received in our common stock in lieu of cash.~~
~~(5)~~
~~Includes $54,982~~$54,977 that Mr. Wilson received in our common stock in lieu of cash.
The following table shows the cash and stock retainers payable to our non-employee directors.
~~Base Retainer~~
~~$55,000~~
~~Additional Retainers:~~
~~Non-Executive Chairman~~
~~75,000~~
~~Lead Director, if any~~
~~33,000~~
~~Audit Committee Chairman~~
~~15,000~~
~~Compensation Committee Chairman~~
~~10,000~~
~~Nominating and Governance Committee Chairman~~
~~10,000~~
~~Annual Stock Grant(1)~~
~~110,000~~

Base Retainer

$
55,000

Additional Retainers:

Non-Executive Chairman(1)

90,000

Lead Director, if any

33,000

Audit Committee Chairman

15,000

Compensation Committee Chairman

10,000

Nominating and Governance Committee Chairman

10,000

Annual Stock Grant(2)

110,000

(1)
Increased from $75,000 to $90,000 effective June 1, 2013.
(2)
The annual stock grant is a grant of shares equal in value to $110,000.
There are no meeting fees.
In addition to liability insurance, we maintain group life insurance in the amount of $100,000 on each non-employee director for the benefit of each director’s beneficiaries during the time each director serves on the board. The annual cost per director is ~~$174.~~$156.
Directors may defer all or any portion of the annual cash retainer and any other cash compensation paid for service as a director pursuant to the Deferred Compensation Plan for Directors. Deferred amounts are held as phantom stock with dividend accruals and are paid out in cash over a five-year period after the director leaves the board.
MDU Resources Group, Inc. Proxy Statement
45

Proxy Statement
Directors are reimbursed for all reasonable travel expenses, including spousal expenses, in connection with attendance at meetings of the board and its committees. All amounts together with any other perquisites were below the disclosure threshold for ~~2012.~~2013.
Our post-retirement income plan for directors was terminated in May 2001 for current and future directors. The net present value of each director’s benefit was calculated and converted into phantom stock. Payment is deferred pursuant to the Deferred Compensation Plan for Directors and will be made in cash over a five-year period after the director’s retirement from the board.
46
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy~~~~Statement~~
Our director stock ownership policy contained in our corporate governance guidelines requires each director to own our common stock equal in value to five times the director’s annual cash base retainer. Shares acquired through purchases on the open market and participation in our director stock plans will be considered in ownership calculations as will ownership of our common stock by a spouse. A director is allowed five years commencing January 1 of the year following the year of that director’s initial election to the board to meet the requirements. The level of common stock ownership is monitored with an annual report made to the compensation committee of the board. For stock ownership, please see “Security Ownership.”
Narrative Disclosure of our Compensation Policies and Practices
as They Relate to Risk Management
The human resources department has conducted an assessment of the risks arising from our compensation policies and practices for all employees and concluded that none of these risks is reasonably likely to have a material adverse effect on the company. Based on the human resources department’s assessment and taking into account information received from the risk identification process, senior management and our management policy committee concluded that risks arising from our compensation policies and practices for all employees are not reasonably likely to have a material adverse effect on the company. After review and discussion with senior management, the compensation committee concurred with this assessment.
As part of its assessment of the risks arising from our compensation policies and practices for all employees, the human resources department identified the principal areas of risk faced by the company that may be affected by our compensation policies and practices for all employees, including any risks resulting from our operating businesses’ compensation policies and practices. In assessing the risks arising from our compensation policies and practices, the human resources department identified the following practices designed to prevent excessive risk taking:
Business management and governance practices

•
risk management is a specific performance competency toincluded in the annual performance assessment of Section 16 officers

•
board oversight on capital expenditure and operating plans that promotes careful consideration of financial assumptions

•
limitation on business acquisitions without board approval

•
employee integrity training programs and anonymous reporting systems

•
quarterly risk assessment and internal control reports at audit committee meetings and

•
prohibitions on holding company stock in an account that is subject to a margin call, pledging company stock as collateral for a loan, and hedging of company stock by Section 16 officers and directors.
Compensation practices

•
active compensation committee review of executive compensation, including ~~comparison~~the ratio of executive compensation to total stockholder return ~~ratio~~compared to the ratio for the performance graph peer group (PEER Analysis)

•
the initial determination of a position’s salary grade to be at or near the 50th percentile of base salaries paid to similar positions at peer group companies and/or relevant industry companies

•
consideration of peer group and/or relevant industry practices to establish appropriate compensation target amounts

•
a balanced compensation mix of fixed salary and annual or long-term incentives tied to the company’s financial performance

•
use of interpolation for annual and long-term incentive awards to avoid payout cliffs

•
negative discretion to adjust any annual or long-term incentive award payment downward

•
use of caps on annual incentive awards and long-term incentive stock grant awards ~~(200% of target for awards granted in 2012)~~

•
discretionary clawbacks on incentive payments in the event of a financial restatement

46
MDU Resources Group, Inc. Proxy Statement

Proxy Statement

•
use of performance shares, rather than stock options or stock appreciation rights, as equity component of incentive compensation

•
use of performance shares with a relative, rather than an absolute, total stockholder return performance goal and mandatory reduction in award if total stockholder return is negative

•
use of three-year performance periods to discourage short-term risk-taking

~~MDU Resources Group, Inc.Proxy Statement~~
47

~~Proxy Statement~~

•
substantive incentive goals measured primarily by return on invested capital, earnings, and earnings per share criteria, which encourage balanced performance and are important to stockholders

•
use of financial performance metrics that are readily monitored and reviewed

•
regular review of the appropriateness of the companies in the performance graph peer group

•
stock ownership requirements for executives participating in the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan and the board

•
mandatory holding periods for 50% of any net after-tax shares earned under long-term incentive awards granted in 2011 and thereafter and

•
use of independent consultants in establishing pay targets at least biennially.

48
MDU Resources Group, Inc. Proxy Statement
47

Proxy Statement

INFORMATION CONCERNING EXECUTIVE OFFICERS
At the first annual meeting of the board after the annual meeting of stockholders, our board of directors elects our executive officers, who serve until their successors are chosen and qualify. A majority of our board of directors may remove any executive officer at any time. Information concerning our executive officers, including their ages, present corporate positions, and business experience, is as follows:

Name
Age
Present Corporate Position and Business Experience
David L. Goodin
51
52
Mr. Goodin was elected ~~President~~president and ~~Chief Executive Officer~~chief executive officer of the company and a director effective January 4, 2013. For more information about Mr. Goodin, see “Election of Directors.”

David C. Barney
58
Mr. Barney was elected president and chief executive officer of Knife River Corporation effective April 30, 2013; president effective January 1, 2012; and president of its western area operations effective October 2008. Prior to that, he was manager of its Northern California region effective July 2005 and became president of Concrete, Inc. in 1996. He joined Concrete, Inc. in 1986 and held numerous positions of increasing responsibility before it was acquired by Knife River in September 1993.

Steven L. Bietz
54
55
Mr. Bietz was elected president and chief executive officer of WBI Holdings, Inc. effective March 4, 2006; president effective January 2, 2006; executive vice president and chief operating officer effective September 1, 2002; vice president-administration and chief accounting officer effective November 3, 1999; vice president-administration effective February 1997; and controller effective January 1994.

William R. Connors
51
52
Mr. Connors was elected vice ~~president–renewable~~president-renewable resources of MDU Resources Group, Inc., effective September 1, 2008. Prior to that, he was vice president-business development of Cascade Natural Gas Corporation effective November 2007; vice president-origination, contracts & regulatory of Centennial Energy Resources, LLC, effective January 2007; vice president-origination, contracts & regulatory of Centennial Power, Inc., effective July 2005; and, was first employed as vice president-contracts & regulatory of Centennial Power, Inc., effective July 2004. Prior to that, Mr. Connors was of counsel to Miller Nash, LLP, a law firm in Seattle, Washington.

Mark A. Del Vecchio
53
54
Mr. Del Vecchio was elected vice ~~president–human~~president-human resources on October 1, 2007. From November 3, 2003 to October 1, 2007, Mr. Del Vecchio was director of executive programs and compensation. From April 1996 to October 31, 2003, Mr. Del Vecchio was vice president and member of The Carter Group, LLC, an executive search and management consulting company.

Dennis L. Haider
~~John G. Harp~~
60
61
Mr. ~~Harp~~Haider was elected ~~chief~~ executive ~~officer of Knife River Corporation~~vice president-business development effective ~~January~~June 1, 2012, and continues to serve as chief executive officer of MDU Construction Services Group, Inc. He was elected president and chief executive officer of Utility Services Inc., which is now MDU Construction Services Group, Inc., effective September 29, 2004. From May 2004 to September 29, 2004, Mr. Harp was vice president of Ledcor Technical Services Inc., a provider of fiber optic cable maintenance services. From April 2001 to May 2004, he was president of JODE CORP., a broadband maintenance company. Mr. Harp sold JODE CORP. to Ledcor Construction in May 2004.2013. Prior to that, he was ~~president~~executive vice president-business development and gas supply of ~~Harp Line Constructors~~Montana-Dakota Utilities Co., Great Plains Natural Gas Co., Cascade Natural Gas Corporation and Intermountain Gas Company from January 1, 2012 to May 31, 2013; executive vice president-regulatory, gas supply, and business development of Cascade Natural Gas Corporation and Intermountain Gas Company from October 1, 2010 to December 31, 2011, and of Montana-Dakota Utilities Co. and ~~Harp Engineering, Inc.~~Great Plains Natural Gas Co. from ~~July 1998, when they were bought by Utility Services Inc.,~~October 1, 2008 to ~~April 2001.~~December 31, 2011; executive vice president-business development and gas supply of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. from August 1, 2005 to September 30, 2008. He joined Montana-Dakota Utilities Co. in 1978 and held numerous positions of increasing responsibility.
~~Nicole A. Kivisto~~
39
Ms. Kivisto was elected vice president, controller and chief accounting officer effective February 17, 2010. Prior to that she was controller effective December 1, 2005; a financial analyst IV in the Corporate Planning Department effective May 2003; a financial and investor relations analyst in the Investor Relations Department effective May 2000; and a financial analyst in the Corporate Accounting Department effective July 1995.

Douglass A. Mahowald
63
64
Mr. Mahowald was elected treasurer and assistant secretary effective February 17, 2010. Prior to that, he was the assistant treasurer and assistant secretary effective August 1992; treasury services manager effective November 1982; and budget statistician effective February 1982.

K. Frank Morehouse
54
55
Mr. Morehouse was elected president and chief executive officer of Montana-Dakota Utilities Co., Great Plains Natural Gas Co., Cascade Natural Gas Corporation, and Intermountain Gas Company effective January 4, 2013. Prior to that, he was executive vice president and general manager of Cascade Natural Gas Corporation effective April 1, 2009, and Intermountain Gas Company effective October 1, 2008; vice president-operations of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. effective January 29, 2007; ~~Region Manager~~region manager for Montana-Dakota Utilities Co. effective October 1, 2004; and ~~Region Manager~~region manager of Great Plains Natural Gas Co. when it was acquired July 1, 2000.

Cynthia J. Norland
58
59
Ms. Norland was elected vice ~~president–administration~~president-administration effective July 16, 2007. Prior to that, she was the assistant vice ~~president–administration~~president-administration effective January 17, 2007; associate general counsel in the Legal Department effective March 6, 2004; and senior attorney in the Legal Department effective June 1, 1995.

Nathan W. Ring
38
Mr. Ring was elected vice president, controller and chief accounting officer effective January 3, 2014. Prior to that, he was treasurer and controller for MDU Construction Services Group, Inc. since late April 2013, was its treasurer from September 2012 through late April 2013 and was its controller from June 2012 until September 2012. Prior to that, he served as assistant controller of D S S Company, a subsidiary of Knife River Corporation, a subsidiary of the Company, from March 2009 to June 2012 and as controller of another Knife River Corporation subsidiary, Hap Taylor & Sons, Inc. doing business as Norm’s Utility Contractor, Inc., from March 2007 to March 2009. He joined MDU Resources Group, Inc. in 2001 as a tax analyst.

48
MDU Resources Group, Inc. Proxy Statement

Proxy Statement

Paul K. Sandness
58
59
Mr. Sandness was elected general counsel and secretary of the company, its divisions and major subsidiaries effective April 6, 2004. He also was elected a director of the company’s principal subsidiaries and was appointed to the Managing Committees of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. Prior to that, he served as a senior attorney effective 1987 and as an assistant secretary of several subsidiary companies.

~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

49

~~Proxy Statement~~

~~William E. Schneider~~
64
Mr. Schneider was elected executive vice president–Bakken Development effective January 1, 2012. Prior to that, he was president and chief executive officer of Knife River Corporation effective May 1, 2005; and senior vice president-construction materials effective from September 15, 1999 to April 30, 2005.

Doran N. Schwartz
43
44
Mr. Schwartz was elected vice president and chief financial officer effective February 17, 2010. Prior to that, he was vice president and chief accounting officer effective March 1, 2006; and assistant vice president-special projects effective September 6, 2005. He was director of membership rewards for American Express, a financial services company, from November 2004 to August 1, 2005; audit manager for Deloitte & Touche, an audit and professional services company, from June 2002 to November 2004; and audit manager/senior for Arthur Andersen, an audit and professional services company, from December 1997 to June 2002.

John P. Stumpf
53
54
Mr. Stumpf was elected vice ~~president–strategic~~president-strategic planning effective December 1, 2006. Mr. Stumpf was vice ~~president–corporate~~president-corporate development for Knife River Corporation from July 1, 2002 to November 30, 2006, and director of corporate development of Knife River Corporation from January 14, 2002 to June 30, 2002. Prior to that, he was special projects manager for Knife River Corporation from May 1, 2000 to January 13, 2002.

Jeffrey S. Thiede
52
Mr. Thiede was elected president and chief executive officer of MDU Construction Services Group, Inc. effective April 30, 2013, and president effective January 1, 2012. Prior to that, he was president of Capital Electric Construction Company, Inc. effective July 2006, and president of Oregon Electric Construction, Inc. effective October 2004. Prior to joining the company, Mr. Thiede was a project director for DPR Construction and worked in the field as an inside wireman.

J. Kent Wells
56
57
Mr. Wells was elected vice chairman of the ~~company~~corporation and a director effective January 4, 2013, and continues to serve as president and chief executive officer of Fidelity Exploration & Production Company, the position for which he was hired effective May 2, 2011. For more information about Mr. Wells, see “Election of Directors.”
SECURITY OWNERSHIP
The table below sets forth the number of shares of our capital stock that each director and each nominee for director, each named executive officer, and all directors and executive officers as a group owned beneficially as of December 31, ~~2012.~~2013.

Name

Common Shares
Beneficially
Owned(1)

Shares Held By
Family
Members(2)

Percent
of Class

Deferred
Director Fees
Held as
Phantom
Stock(3)

Common Shares
Beneficially
Owned(1)

Shares Held By
Family
Members(2)

Percent
of Class

Deferred
Director Fees
Held as
Phantom
Stock(3)

Steven L. Bietz

69,392
(4)

*

Thomas Everist

1,885,590
(5)

1.0

29,243

1,139,193
(4)

*

29,998

Karen B. Fagg

37,481

*

42,081

*

David L. Goodin

43,477
(5)(6)

8,317

*

Mark A. Hellerstein

1,501

*

Terry D. Hildestad

214,073

*

10,249

*

A. Bart Holaday

41,200

*

46,646

*

Dennis W. Johnson

88,583
(6)

4,560

*

84,470
(7)

4,560

*

Thomas C. Knudson

24,467

*

28,070

*

Richard H. Lewis

28,167

*

18,185

William E. McCracken

1,501

*

Patricia L. Moss

63,225

*

66,328

*

Harry J. Pearce

218,017

*

48,081

221,620

*

49,323

William E. Schneider

104,555
(7)

800

*

Paul K. Sandness

53,996
(5)

*

Doran N. Schwartz

24,763
(4) (8)

1,300

*

28,712
(5)(8)

1,300

*

Jeffrey S. Thiede

1,941
(5)

*

J. Kent Wells

27,743

*

27,743

*

John K. Wilson

90,549

*

95,995

*

All directors and executive officers as a group (23 in number)

3,222,078

20,228

1.7

95,509

All directors and executive officers as a group (26 in number)

2,155,227

20,584

1.1

79,321

*
Less than one percent of the class.
(1)
“Beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or investment power with respect to a security.
(2)
These shares are included in the “Common Shares Beneficially Owned” column.
(3)
These shares are not included in the “Common Shares Beneficially Owned” column. Directors may defer all or a portion of their cash compensation pursuant to the Deferred Compensation Plan for Directors. Deferred amounts are held as phantom stock with dividend accruals and are paid out in cash over a five-year period after the director leaves the board.
(4)
Includes 1,070,000 shares of common stock acquired through the sale of Connolly-Pacific to us.
(5)
Includes full shares allocated to the officer’s account in our 401(k) retirement plan.
~~(5)~~(6)
~~Includes 1,820,000~~The total includes 8,317 shares ~~of common stock acquired through the sale of Connolly-Pacific to us.~~owned by Mr. Goodin’s wife.
~~(6)~~(7)
Mr. Johnson disclaims all beneficial ownership of the 4,560 ~~shares owned by his wife.~~
~~(7)~~
~~Mr. Schneider disclaims all beneficial ownership of the 800~~ shares owned by his wife.
(8)
The total includes 1,300 shares owned by Mr. Schwartz’s wife.

50

MDU Resources Group, Inc. Proxy Statement
49

Proxy Statement

We prohibit our directors and executive officers from hedging their ownership of company common stock. They may not enter into transactions that allow them to benefit from devaluation of our stock or otherwise own stock technically but without the full benefits and risks of such ownership.
Directors, executive officers, and related persons are prohibited from holding our common stock in a margin account, with certain exceptions, or pledging company securities as collateral for a loan. Company common stock may be held in a margin brokerage account only if the stock is explicitly excluded from any margin, pledge, or security provisions of the customer agreement. Company common stock may be held in a cash account, which is a brokerage account that does not allow any extension of credit on securities. “Related person” means an executive officer’s or director’s spouse, minor child, and any person (other than a tenant or domestic employee) sharing the household of a director or executive officer, as well as any entities over which a director or executive officer exercises control.
The table below sets forth information with respect to any person we know to be the beneficial owner of more than five percent of any class of our voting securities.

Title of Class

Name and Address
of Beneficial Owner

Amount and Nature
of Beneficial Ownership

Percent
of Class

Common Stock

BlackRock, Inc.
40 East 52nd Street
New York, NY 10022

13,303,128
(1)
7.00
%

Common Stock

State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, MA 02111

9,956,410
(2)
5.30
%

Common Stock

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

11,949,283
(3)
6.32
%
(1)
In a Schedule 13G/A, Amendment No. 4, filed on January 30, 2014, BlackRock, Inc. reports sole voting power with respect to 12,183,613 shares and sole dispositive power with respect to 13,303,128 shares as the parent holding company or control person of BlackRock Capital Management, BlackRock Financial Management, Inc., BlackRock Japan Co. Ltd., BlackRock Advisors (UK) Limited, BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors, BlackRock Asset Management Canada Limited, BlackRock Advisors, LLC, BlackRock Investment Management, LLC, BlackRock Investment Management (Australia) Limited, BlackRock Life Limited, BlackRock (Netherlands) B.V., BlackRock Fund Managers Ltd, BlackRock Asset Management Ireland Limited, BlackRock International Limited, BlackRock Investment Management (UK) Limited, BlackRock (Luxembourg) S.A., BlackRock Asset Management North Asia Limited and BlackRock Fund Management Ireland Limited.

(2)
In a Schedule 13G, filed on February 3, 2014, State Street Corporation reports shared voting and dispositive power with respect to all shares as the parent holding company or control person of State Street Global Advisors France S.A., State Street Bank and Trust Company, SSGA Funds Management, Inc., State Street Global Advisors Limited, State Street Global Advisors Ltd, State Street Global Advisors, Australia Limited, State Street Global Advisors Japan Co., Ltd., State Street Global Advisors, Asia Limited and SSARIS Advisors LLC.

(3)
In a Schedule 13G/A, Amendment No. 1, filed on February 11, 2014, The Vanguard Group reports sole dispositive power with respect to 11,805,392 shares, shared dispositive power with respect to 143,891 shares and sole voting power with respect to 172,291 shares. These shares include 106,291 shares beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of collective trust accounts, and 103,600 shares beneficially owned by Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of Australian investment offerings.

Title of Class

Name and Address
of Beneficial Owner

Amount and Nature
of Beneficial Ownership

Percent of
Class

Common Stock

BlackRock, Inc.
40 East 52nd Street
New York, NY 10022

11,808,063
(1)
6.25
%

Common Stock

T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202

11,315,091
(2)
5.90
%

Common Stock

State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, MA 02111

9,760,389
(3)
5.20
%

Common Stock

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

10,319,105
(4)
5.46
%

~~(1)~~
In a Schedule 13G/A, Amendment No. 3, filed on February 5, 2013, BlackRock, Inc. reports sole voting and dispositive power with respect to all shares as the parent holding company or control person of BlackRock Capital Management, BlackRock Financial Management, Inc., BlackRock Japan Co. Ltd., BlackRock Advisors (UK) Limited, BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors, BlackRock Asset Management Canada Limited, BlackRock Asset Management Australia Limited, BlackRock Advisors, LLC, BlackRock Investment Management, LLC, BlackRock Investment Management (Australia) Limited, BlackRock Life Limited, BlackRock (Netherlands) B.V., BlackRock Fund Managers Limited, BlackRock Asset Management Ireland Limited, BlackRock International Limited, and BlackRock Investment Management (UK) Limited.
~~(2)~~
In a Schedule 13G/A, Amendment No. 1, filed on February 7, 2013, T. Rowe Price Associates, Inc. reports sole voting power with respect to 1,724,000 shares and sole dispositive power with respect to 11,315,091 shares. These securities are owned by individual and institutional investors to which T. Rowe Price serves as investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price is deemed to be a beneficial owner of such securities; however, T. Rowe Price expressly disclaims that it is, in fact, the beneficial owner of such securities.
~~(3)~~
In a Schedule 13G, filed on February 12, 2013, State Street Corporation reports shared voting and dispositive power with respect to all shares as the parent holding company or control person of State Street Global Advisors France S.A., State Street Bank and Trust Company, SSGA Funds Management, Inc., State Street Global Advisors Limited, State Street Global Advisors Ltd, State Street Global Advisors, Australia Limited, State Street Global Advisors Japan Co., Ltd. and State Street Global Advisors, Asia Limited.
~~(4)~~
In a Schedule 13G, filed on February 13, 2013, The Vanguard Group reports sole dispositive power with respect to 10,140,265 shares, shared dispositive power with respect to 178,840 shares and sole voting power with respect to 191,340 shares. These shares include 127,440 shares beneficially owned by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of collective trust accounts, and 115,300 shares beneficially owned by Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., as a result of its serving as investment manager of Australian investment offerings.

50

MDU Resources Group, Inc. Proxy Statement

51

Proxy Statement

RELATED PERSON TRANSACTION DISCLOSURE
The board of directors has adopted a policy for the review of related person transactions. This policy is contained in our corporate governance guidelines, which are posted on our website at www.mdu.com.
The audit committee reviews related person transactions in which we are or will be a participant to determine if they are in the best interests of our stockholders and the company. Financial transactions, arrangements, relationships, or any series of similar transactions, arrangements, or relationships in which a related person had or will have a material interest and that exceed $120,000 are subject to the committee’s review.
Related persons are directors, director nominees, executive officers, holders of 5% or more of our voting stock, and their immediate family members. Immediate family members are spouses, parents, stepparents, mothers-in-law, fathers-in-law, siblings, brothers-in-law, sisters-in-law, children, stepchildren, daughters-in-law, sons-in-law, and any person, other than a tenant or domestic employee, who shares the household of a director, director nominee, executive officer, or holder of 5% or more of our voting stock.
After its review, the committee makes a determination or a recommendation to the board and officers of the company with respect to the related person transaction. Upon receipt of the committee’s recommendation, the board of directors or officers, as the case may be, take such action as they deem appropriate in light of their responsibilities under applicable laws and regulations.
~~The audit committee and the board of directors reviewed two leases between an indirect subsidiary of the company and a Nevada limited liability company, MOJO Montana, LLC (MOJO).~~ John G. Harp, who iswas chief executive officer of MDU Construction Services Group, Inc. and Knife River Corporation until his retirement in late April 2013, and his brother, Michael D. Harp, are managing members of ~~MOJO. The~~MOJO Montana, LLC, a Nevada limited liability company (MOJO), which has leased properties ~~described in these two leases are~~ located in Kalispell and Billings, Montana, ~~and have been leased~~to an indirect subsidiary of the company since 1998. In May 2010, the audit committee determined that renewing these leases was in the company’s best interests after it reviewed 2010 third party appraisals for the properties and considered the consumer price index and our operating companies’ knowledge of local property markets. The audit committee recommended and the board approved three-year leases, which expired June 30, 2013, for these properties that provide for our indirect subsidiary to pay a combined monthly rent of $9,508 to MOJO. ~~The~~In May 2013, after Mr. Harp had retired, the leases ~~expire~~were amended to extend the term for two additional years, for a combined monthly rent of $8,823, with the option to renew the leases for one additional year, expiring June 30, ~~2013.~~2016. Rent for the additional year is to be renegotiated based upon fair market value as determined by the parties.
CORPORATE GOVERNANCE
Director Independence
The board of directors has adopted guidelines on director independence that are included in our corporate governance guidelines, which are available for review on our corporate website at http://www.mdu.com/Documents/Governance/CorporateGovernance.pdf. The board of directors has determined that Thomas Everist, Karen B. Fagg, A. Bart Holaday, Dennis W. Johnson, Thomas C. Knudson, Richard H. Lewis, Patricia L. Moss, Harry J. Pearce, and John K. Wilson:
The board of directors has adopted guidelines on director independence that are included in our corporate governance guidelines, which are available for review on our corporate website at http://www.mdu.com/proxystatement/corporate-governance. The board of directors has determined that current directors Thomas Everist, Karen B. Fagg, Mark A. Hellerstein, A. Bart Holaday, Dennis W. Johnson, Thomas C. Knudson (not standing for re-election), William E. McCracken, Patricia L. Moss, Harry J. Pearce, and John K. Wilson:

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have no material relationship with us and

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are independent in accordance with our director independence guidelines and the New York Stock Exchange listing standards.
The board of directors previously determined that Richard H. Lewis, who did not stand for re-election at the 2013 annual meeting, had no material relationship with us and was independent in accordance with our director independence guidelines and the New York Stock Exchange listing standards during the time he was a director.
In determining director independence, the board of directors reviewed and considered information about any transactions, relationships, and arrangements between the independent directors and their immediate family members and affiliated entities on the one hand, and the company and its affiliates on the other, and in particular the following transactions, relationships, and arrangements:
~~In determining director independence for 2012, the board of directors considered the following transactions or relationships:~~
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Mr. Everist’s ownership of approximately 1.87 million shares in 2011 and approximately 1.89 million shares in 2012 of our common stock. In December 2011, we entered into a two-year contract with WebFilings, LLC, which offers a cloud-based solution for meeting SEC reporting requirements. The contract provides for a quarterly subscription fee of approximately $13,000 to use WebFilings’ software and for additional fees to be determined based on the number of users and additional services requested. The additional fees for 2011 were $4,500, for 2012 were $5,000, and we expect them to be approximately $3,100 for 2013. Mr. Everist is a limited partner and owns less than 1% of WebFilings, LLC. The MDU Resources Foundation (Foundation) made charitable contributions to Medcenter One Foundation, which is now known as Sanford Health following a merger effective July 2, 2012, in the amount of $500 in 2011 and $1,250 in 2012. Mr. Everist is a member of the board of directors of the Sanford Health Foundation and his wife, Barbara Everist, is vice chairman of the board of trustees of Sanford Health.

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~~charitable contributions from~~Business relationships with entities with which a director is affiliated:Purchase by the ~~Foundation~~company in the ~~amount~~ordinary course of ~~$2,700~~business of cloud-based services for meeting SEC filing requirements from WebFilings, LLC, a company in ~~2011 and $2,625 in 2012 to the University of North Dakota Foundation –~~which Mr. ~~Holaday serves as the chairman~~Everist is a limited partner who owns less than 1% of the ~~board and~~company. Payments by the company to WebFilings in any of the last three fiscal years did not exceed the greater of $1 million or 2% of WebFilings’ consolidated gross revenues. The transaction was entered into on substantially the same terms as ~~a trustee~~those prevailing at the time for the University of North Dakota Center for Innovation Foundation and also serves as a director for the University of North Dakota Foundation; charitable contributions from the Foundation in the amount of $3,750 in 2011 and $27,250 in 2012 to Jamestown College or its foundation – Mr. Holaday serves as a trustee for Jamestown College.comparable transactions with non-affiliated entities.

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~~charitable contributions from the Foundation to the City of Dickinson in the amount of $20,000 in 2011 and 2012 – Mr. Johnson is president of the City of Dickinson board of commissioners.~~

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~~charitable~~Charitable contributions ~~from~~by the MDU Resources Foundation (Foundation) to nonprofit organizations, where a director, or a director’s spouse, serves or has served as a director, chair, or vice chair of the board of trustees, trustee, or member of the organization or related entity:Charitable contributions by the Foundation to Sanford Health Foundation (formerly known as Medcenter One Foundation), Billings Catholic School Foundation, Montana State University Foundation, the Denver Children’s Advocacy Center, the University of North Dakota Foundation, Jamestown College and its foundation, the City of Dickinson, Colorado UpLift, and Alliance in ~~the amount of $25,000 in 2011 and $20,000 in 2012 – Mr. Lewis is a board director and chairman~~Choice for Education. None of the ~~Development Board~~contributions made to any of ~~Colorado UpLift; charitable contributions from~~these nonprofit entities during the ~~Foundation~~last three fiscal years exceeded in any single year the ~~amount~~greater of ~~$10,000 in 2011 and $5,000 in 2012 to~~$1 million or 2% of the ~~Alliance for Choice in Education – Mr. Lewis serves on the Board of Trustees for Alliance.~~relevant organization’s consolidated gross revenues.
~~Director Resignation upon Change of Job Responsibility~~
Our corporate governance guidelines require a director to tender his or her resignation after a material change in job responsibility. In 2012, no directors submitted resignations under this requirement.
~~Code of Conduct~~
~~We have a code of conduct and ethics, which we refer to as the Leading With Integrity Guide, which applies to all employees, directors, and officers.~~

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Ownership by directors of company stock:Ownership by Mr. Everist, directly or indirectly, of approximately 1.14 million shares of company stock, which represents less than 1% of our outstanding common stock, at December 31, 2013, and approximately 1.89 million shares, which was 1% of our outstanding common stock, at December 31, 2012.

Director Resignation upon Change of Job Responsibility
Our corporate governance guidelines require a director to tender his or her resignation after a material change in job responsibility. In 2013, no directors submitted resignations under this requirement.
Code of Conduct
We have a code of conduct and ethics, which we refer to as the Leading With Integrity Guide, which applies to all employees, directors, and officers.
We intend to satisfy our disclosure obligations regarding:

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amendments to, or waivers of, any provision of the code of conduct that applies to our principal executive officer, principal financial officer, and principal accounting officer and that relates to any element of the code of ethics definition in Regulation S-K, Item 406(b) and

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waivers of the code of conduct for our directors or executive officers, as required by New York Stock Exchange listing standards by posting such information on our website at http://www.mdu.com/~~Documents/Governance/IntegrityGuide.pdf.~~proxystatement/integrity-guide.

Board Leadership Structure and Board’s Role in Risk Oversight
The board separated the positions of chairman of the board and chief executive officer in 2006 and elected Harry J. Pearce, a non-employee independent director, as our chairman. Separating these positions allows our chief executive officer to focus on the full-time job of running our business, while allowing the chairman of the board to lead the board in its fundamental role of providing advice to and independent oversight of management. The board believes this structure recognizes the time, effort, and energy that the chief executive officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chairman, particularly as the board’s oversight responsibilities continue to grow and demand more time and attention. The fundamental role of the board of directors is to provide oversight of the management of the company in good faith and in the best interests of the company and its stockholders. Having an independent chairman is a means to ensure the chief executive officer is accountable for managing the company in close alignment with the interests of stockholders. An independent chairman avoids the conflicts of interest that arise when the chairman and chief executive positions are combined and more effectively manages relationships between the board and the chief executive officer. An independent chairman is in a better position to encourage frank and lively discussions and to assure that the company has adequately assessed all appropriate business risks before adopting its final business plans and strategies. In August 2012, we amended our bylaws and corporate governance guidelines to require that our chairman be independent. The board believes that having separate positions and having an independent outside director serve as chairman is the appropriate leadership structure for the company and demonstrates our commitment to good corporate governance.
The board separated the positions of chairman of the board and chief executive officer in 2006 and elected Harry J. Pearce, a non-employee independent director, as our chairman. Separating these positions allows our chief executive officer to focus on the full-time job of running our business, while allowing the chairman of the board to lead the board in its fundamental role of providing advice to and independent oversight of management. The board believes this structure recognizes the time, effort, and energy that the chief executive officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our chairman, particularly as the board’s oversight responsibilities continue to grow and demand more time and attention. The fundamental role of the board of directors is to provide oversight of the management of the company in good faith and in the best interests of the company and its stockholders. Having an independent chairman is a means to ensure the chief executive officer is accountable for managing the company in close alignment with the interests of stockholders. An independent chairman avoids the conflicts of interest that arise when the chairman and chief executive positions are combined and more effectively manages relationships between the board and the chief executive officer. An independent chairman is in a better position to encourage frank and lively discussions and to assure that the company has adequately assessed all appropriate business risks before adopting its final business plans and strategies. In August 2012, we amended our bylaws and corporate governance guidelines to require that our chairman be independent. The board believes that having separate positions and having an independent outside director serve as chairman is the appropriate leadership structure for the company and demonstrates our commitment to good corporate governance.
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks, environmental and regulatory risks, and others, such as the impact of competition, weather conditions, limitations on our ability to pay dividends, increased pension plan obligations, and cyber attacks or acts of terrorism. Management is responsible for the day-to-day management of risks the company faces, while the board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.
The board believes that establishing the right “tone at the top” and that full and open communication between management and the board of directors are essential for effective risk management and oversight. Our chairman meets regularly with our president and chief executive officer and other senior officers to discuss strategy and risks facing the company. Senior management attends the quarterly board meetings and is available to address any questions or concerns raised by the board on risk management-related and any other
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matters. Each quarter, the board of directors receives presentations from senior management on strategic matters involving our operations. The board holds strategic planning sessions with senior management to discuss strategies, key challenges, and risks and opportunities for the company.
While the board is ultimately responsible for risk oversight at our company, our three board committees assist the board in fulfilling its oversight responsibilities in certain areas of risk. The audit committee assists the board in fulfilling its oversight responsibilities with respect to risk assessment and management in a general manner and specifically in the areas of financial reporting, internal controls and
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
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~~Proxy Statement~~
compliance with legal and regulatory requirements, and, in accordance with New York Stock Exchange requirements, discusses policies with respect to risk assessment and risk management and their adequacy and effectiveness. Risk assessment reports are regularly provided by management to the audit ~~committee.~~committee or the full board. This opens the opportunity for discussions about areas where the company may have material risk exposure, steps taken to manage those exposures, and the company’s risk tolerance in relation to company strategy. The audit committee reports regularly to the board of directors on the company’s management of risks in the audit committee’s areas of responsibility. The compensation committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The nominating and governance committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance.
Board Meetings and Committees
During 2012, the board of directors held seven meetings. Each director attended at least 75% of the combined total meetings of the board and the committees on which the director served during 2012. Director attendance at our annual meeting of stockholders is left to the discretion of each director. Three directors attended our 2012 annual meeting of stockholders.
During 2013, the board of directors held eight meetings. Each director attended at least 75% of the combined total meetings of the board and the committees on which the director served during 2013. Director attendance at our annual meeting of stockholders is left to the discretion of each director. Three directors attended our 2013 annual meeting of stockholders.
Harry J. Pearce was elected non-employee chairman of the board on August 17, 2006. Mr. Pearce served as lead director from February 15, 2001 to August 17, 2006. He presides at the executive session of the non-employee directors held in connection with each regularly scheduled quarterly board of directors meeting. The non-employee directors also meet in executive session with the chief executive officer at each regularly scheduled quarterly board of directors meeting. All of our non-employee directors are independent directors.
The board has a standing audit committee, compensation committee, and nominating and governance committee. These committees are composed entirely of independent directors.
The audit, compensation, and nominating and governance committees have charters, which are available for review on our website at http://www.mdu.com/~~Governance/Pages/BoardChartersandCommittees.aspx.~~proxystatement/board-charters. Our corporate governance guidelines are available at http://www.mdu.com/~~Documents/Governance/CorporateGovernance.pdf,~~proxystatement/corporate-governance, and our Leading With Integrity Guide is also on our website at http://www.mdu.com/~~Documents/Governance/IntegrityGuide.pdf.~~
~~Nominating and Governance Committee~~
~~The nominating and governance committee met four times during 2012. The committee members were Karen B. Fagg, chairman, Richard H. Lewis, A. Bart Holaday, and Patricia L. Moss.~~proxystatement/integrity-guide.

Nominating and Governance Committee
The nominating and governance committee met four times during 2013. The committee members are Karen B. Fagg, chairman, A. Bart Holaday, William E. McCracken, and Patricia L. Moss. Richard H. Lewis served on the committee until the 2013 annual meeting, when he did not stand for re-election. William E. McCracken joined the committee effective August 1, 2013.
The nominating and governance committee provides recommendations to the board with respect to:

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board organization, membership, and function

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committee structure and membership

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succession planning for our executive management and directors and

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corporate governance guidelines applicable to us.
The nominating and governance committee assists the board in overseeing the management of risks in the committee’s areas of responsibility.
The committee identifies individuals qualified to become directors and recommends to the board the nominees for director for the next annual meeting of stockholders. The committee also identifies and recommends to the board individuals qualified to become our principal officers and the nominees for membership on each board committee. The committee oversees the evaluation of the board and management.
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In identifying nominees for director, the committee consults with board members, our management, consultants, and other individuals likely to possess an understanding of our business and knowledge concerning suitable director candidates.
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~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

Our corporate governance guidelines include our policy on consideration of director candidates recommended to us. We will consider candidates that our stockholders recommend. Stockholders may submit director candidate recommendations to the nominating and governance committee chairman in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650. Please include the following information:

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the candidate’s name, age, business address, residence address, and telephone number

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the candidate’s principal occupation

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the class and number of shares of our stock owned by the candidate

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a description of the candidate’s qualifications to be a director

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whether the candidate would be an independent director and

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any other information you believe is relevant with respect to the recommendation.
These guidelines provide information to stockholders who wish to recommend candidates for director for consideration by the nominating and governance committee. Stockholders who wish to actually nominate persons for election to our board at an annual meeting of stockholders must follow the procedures set forth in section 2.08 of our bylaws. You may obtain a copy of the bylaws by writing to the secretary of MDU Resources Group, Inc. at the address above. Our bylaws are also available on our website at http://www.mdu.com/~~Governance/Pages/CorporateGovernanceGuidelines.aspx.~~proxystatement/corporate-bylaws. See also the section entitled ~~“2014~~“2015 Annual Meeting of Stockholders” later in the proxy statement.
There are no differences in the manner by which the committee evaluates director candidates recommended by stockholders and those recommended by other sources.
In evaluating director candidates, the committee considers an individual’s:

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background, character, and experience, including experience relative to our company’s lines of business

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skills and experience which complement the skills and experience of current board members

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success in the individual’s chosen field of endeavor

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skill in the areas of accounting and financial management, banking, general management, human resources, marketing, operations, public affairs, law, technology, and operations abroad

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background in publicly traded companies

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geographic area of residence

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diversity of business and professional experience, skills, gender, and ethnic background, as appropriate in light of the current composition and needs of the board

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independence, including any affiliation or relationship with other groups, organizations, or entities and

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prior and future compliance with applicable law and all applicable corporate governance, code of conduct and ethics, conflict of interest, corporate opportunities, confidentiality, stock ownership and trading policies, and our other policies and guidelines.
As indicated above, when identifying nominees to serve as director, the nominating and governance committee will consider candidates with diverse business and professional experience, skills, gender, and ethnic background, as appropriate, in light of the current composition and needs of the board. The nominating and governance committee assesses the effectiveness of this policy annually in connection with the nomination of directors for election at the annual meeting of stockholders. The composition of the current board reflects diversity in business and professional experience, skills, and gender.
The committee generally will hire an outside firm to perform a background check on potential nominees.
Since our 2013 annual meeting, Messrs. Hellerstein and McCracken were recommended to the nominating and governance committee and elected to the board effective August 1, 2013. Mr. Pearce, a non-employee director and our chairman of the board of directors, recommended Mr. McCracken, and Mr. Robert L. Nance, a former non-employee director and stockholder, recommended Mr. Hellerstein. The committee did not retain a search firm to identify or evaluate any nominee, and no fees were paid.

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Audit Committee
~~The audit committee is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.~~
The audit committee is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
The audit committee met eight times during ~~2012.~~2013. The audit committee members are Dennis W. Johnson, chairman, Mark A. Hellerstein, A. Bart Holaday, ~~Richard H. Lewis,~~ and John K. Wilson. Richard H. Lewis served on the committee until the 2013 annual meeting when he did not stand for re-election. Mark A. Hellerstein joined the committee effective August 1, 2013. The board of directors has determined that Messrs. Johnson, Hellerstein, Holaday, Lewis (during the time he was on the committee), and Wilson are “audit committee financial experts” as defined by Securities and Exchange Commission regulations, and Messrs. Johnson, Hellerstein, Holaday, Lewis (during the time he was on the committee), and Wilson meet the independence standard for audit committee members under our director independence guidelines and the New York Stock Exchange listing standards, including the Securities and Exchange Commission’s audit committee member independence requirements.
The audit committee assists the board of directors in fulfilling its oversight responsibilities to the stockholders and serves as a communication link among the board, management, the independent ~~auditors,~~registered public accounting firm, and the internal auditors. The audit committee:

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assists the board’s oversight of

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the integrity of our financial statements and system of internal controls

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our compliance with legal and regulatory requirements

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the independent registered public accounting firm’s qualifications and independence

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~~the independent auditors’ qualifications and independence~~
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the performance of our internal audit function and independent ~~auditors~~registered public accounting firm and

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risk management in the audit committee’s areas of responsibility and

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arranges for the preparation of and approves the report that Securities and Exchange Commission rules require we include in our annual proxy statement.

Audit Committee Report
In connection with our financial statements for the year ended December 31, 2013, the audit committee has (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent registered public accounting firm (the “Auditors”) the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees; (3) received the written disclosures and the letter from the Auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the Auditors’ communications with the audit committee concerning independence, and has discussed with the Auditors their independence.
Based on the review and discussions referred to in items (1) through (3) of the above paragraph, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2013, for filing with the Securities and Exchange Commission.
Dennis W. Johnson, Chairman
Mark A. Hellerstein
A. Bart Holaday
John K. Wilson

In connection with our financial statements for the year ended December 31, 2012, the audit committee has (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, (AICPA,~~Professional Standards~~, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; (3) received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with the independent accountant the independent accountant’s independence.

Based on the review and discussions referred to in items (1) through (3) of the above paragraph, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2012, for filing with the Securities and Exchange Commission.
~~Dennis W. Johnson, Chairman~~
~~A. Bart Holaday~~
~~Richard H. Lewis~~
~~John K. Wilson~~

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~~CompensationCommittee~~
~~The compensation committeemet five times during 2012. The compensation committee members are Thomas Everist, chairman, Karen B. Fagg, Thomas C. Knudson, and Patricia L. Moss.~~
Compensation Committee
The compensation committee met five times during 2013. The compensation committee members are Thomas Everist, chairman, Karen B. Fagg, Thomas C. Knudson, and Patricia L. Moss.
The compensation committee’s responsibilities, as ~~setforth~~set forth in its charter, include:

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~~reviewand~~review and recommend changes to the board regarding our executive compensation policies for directors and executives

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~~evaluatethe~~evaluate the chief executive officer’s performance and, either as a committee or together with other independent directors as directed by the board, determine his or her compensation

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recommend to the board the compensation of our other Section 16 officers and directors

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establish goals, make awards, review performance and determine, or recommend to the board, awards earned under our annual and long-term incentive compensation plans

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review and discuss with management the ~~compensation discussion~~Compensation Discussion and ~~analysis~~Analysis and based upon such review and discussion, determine whether to recommend to the board that the Compensation Discussion and Analysis be included in our proxy statement and/or our Annual Report on Form 10-K

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arrange for the preparation of and approve the compensation committee report to be included in our proxy statement and/or Annual Report on Form 10-K ~~and~~

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assist the board in overseeing the management of risk in the committee’s areas of ~~responsibility.~~responsibility and
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appoint, compensate, and oversee the work of any compensation consultant, legal counsel or other adviser retained by the compensation committee.
The compensation ~~committeeand~~committee and the board of directors have sole and direct responsibility for determining compensation for our Section 16 officers and directors. The compensation committee makes recommendations to the board regarding compensation of all Section 16 officers, and the board then approves the recommendations. The compensation committee and the board may not delegate their authority. They may, however, use recommendations from outside consultants, the chief executive officer, and the human resources department.~~Thechief~~ The chief executive officer, the vice president-human resources, and general counsel regularly attend compensation committee meetings. The committee meets in executive session as needed. The committee’s practice has been to retain a compensation consultant every other year to conduct a competitive analysis on executive compensation. The committee ~~retained~~did not retain a compensation consultant in ~~2012~~2013 to prepare a competitive assessment for ~~2013~~2014 compensation for our Section 16 officers.
We ~~discussour~~discuss our processes and procedures for consideration and determination of compensation of our Section 16 officers in the Compensation Discussion and Analysis. We also discuss in the Compensation Discussion and Analysis the role of our executive officers in determining or recommending compensation for our Section 16 officers.
~~During2012,~~During 2013, the ~~compensation committee retained Towers Watson to prepare~~vice president-human resources and the ~~2013~~human resources department prepared the 2014 competitive assessment covering our Section 16 officers. ~~In an engagement letter dated March 23, 2012,~~The vice president-human resources and the ~~compensation committee asked Towers Watson to prepare separate executive compensation reviews for the Section 16 officers and for~~human resources department also worked with the chief executive ~~officer. In its review for the Section 16 officers, excluding the chief executive~~ officer ~~Towers Watson was asked~~ to:

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~~match the Section 16 officer positions to survey data to generate 2013 market estimates for~~recommend salary grade midpoints, base salaries, ~~and short-term~~annual and long-term ~~incentives~~incentive targets, benefit level increases under our Supplemental Income Security Plan, and employer contributions under our Nonqualified Defined Contribution Plan for our executive officers other than the chief executive officer and the vice president-human resources

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~~address general trendsin~~review recommended base salary grades, salary increases, and annual and long-term incentive targets submitted by executive ~~compensation~~officers for officers reporting to them for reasonableness and alignment with company or business segment objectives

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~~compare base salariesand target short-term~~review and update annual and long-term ~~incentives, by position, to market estimates and recommend salary grade changes as appropriate~~incentive programs

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construct a recommended ~~2013~~2014 salary grade structure and

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verify the competitiveness of short-term and long-term incentive targets associated with salary grades and ~~recommend~~recommended modifications as appropriate.

As discussed in the Compensation Discussion and Analysis, Mr. Goodin recommended compensation for Mr. Thiede for the remainder of 2013 in connection with his promotion.

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~~In the chief executive officer review, Towers Watson was asked to use survey data and data from the company’s performance graph peer group to:~~
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~~develop competitive estimatesfor base salary and target short-term and long-term incentives~~
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~~recommend changes in base salary and incentive targets based on the competitive data and~~
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~~address general trendsin chief executive officer compensation.~~
The compensation committee has sole ~~authorityto~~authority to retain ~~discharge, and approve fees and other terms and conditions for retention~~or obtain the advice of compensation consultants, legal counsel or other advisers to assist in consideration of the compensation of the chief executive officer, the other Section 16 officers, and the board of directors. The committee is directly responsible for the appointment, compensation and oversight of the work of any adviser retained by the committee. Prior to retaining an adviser and annually, the committee will consider all factors relevant to the adviser’s independence from management. The compensation committee charter requires the committee’s pre-approval of the engagement of the committee’s compensation consultants by the company for any other purpose. The compensation committee authorized the company to participate in compensation and employee benefits surveys sponsored by Towers Watson in ~~2012.~~2013.
Annually the compensation committee conducts an assessment of any potential conflicts of interest raised by the work of any compensation consultant to determine if any conflict exists and how such conflict should be addressed. The compensation committee ~~requestedand~~requested and received information from its compensation consultant, Towers Watson, to assist the committee in determining whether Towers Watson’s work raised any conflict of interest. The compensation committee has reviewed Towers Watson’s responses to its request and determined that the work of Towers Watson did not raise any conflict of interest in ~~2012.~~2013.
The ~~boardof~~board of directors determines compensation for our non-employee directors based upon recommendations from the compensation committee. The compensation committee’s practice has been to retain a compensation consultant every other year to conduct a competitive analysis on director compensation. ~~The~~
In an engagement letter dated March 14, 2013, and signed by the chairman of the compensation committee, ~~did not retain an outside consultant for~~ the ~~2012~~compensation committee retained Towers Watson to prepare the 2013 compensation review for the board of directors. In its review of board of director compensation, Towers Watson was asked to:
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identify market trends relative to director compensation
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report on the competitive position of our director compensation program as compared to our performance graph peer group
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recommend alternatives for our board of directors to consider and
•
research our performance graph peer group companies to identify practices relating to director recruitment, such as one-time stock grants upon election to the board.
At its May ~~2012~~2013 meeting, the committee reviewed ~~the~~Towers Watson’s analysis of competitive data and recent trends in director compensation. The analysis compared our director compensation to that of our performance graph peer group, including ~~independent~~the components of director compensation: retainer, committee chair premiums, and equity. The Towers Watson report showed the company’s median total direct compensation, which includes the annual cash retainer, board fees, if applicable, and equity compensation, was at the 38th percentile at $165,000, versus the market median of the performance graph peer group of $170,084. Additionally, the company’s committee chair premiums of $15,000, $10,000, and $10,000 for audit, compensation, and nominating/governance, respectively, approximated the median committee chair premiums of the performance graph peer group of $14,500, $10,000, and $8,000, respectively. Based on these results, the compensation committee recommended, and the board of directors approved, no change to director compensation or the committee chair premiums for 2013.
The human resources department augmented Towers Watson’s report by showing a three-year history (2011, 2012, and 2013) of the non-executive chairman of the ~~board~~board’s total direct compensation ~~prepared by the human resources department and the vice president-human resources. The company’s analysis was based on proxy data from~~as compared to that of our performance graph peer group companies compiled by ~~Equilar~~Equilar. Also, the human resources department’s analysis included a two-year history (2012 and on data from the National Association of Corporate Directors 2011/2012 Director Compensation Report. The committee compared the data to our directors’ compensation and each of its components. After review and discussion2013) of the ~~market data, which indicated that our median director compensation of $165,000 was below the median~~non-executive chairman’s total direct compensation ~~of$179,596~~compared to total direct compensation for ~~large companies~~non-executive chairmen at “large companies” included in the National Association of Corporate Directors ~~2011/2012~~(NACD) Director Compensation Report, which have revenues ranging from $2.5 billion to $10 billion and ~~consistent with~~a median revenue of $4.7 billion. The human resources department compared the total direct compensation in 2011, 2012, and 2013 of $240,000 for the company’s non-executive chairman to the median total direct compensation of ~~$162,002~~performance graph peer companies of $272,754, $282,202, and $239,511 for 2011, 2012, and 2013, respectively. Also, the ~~peer~~total direct compensation for the company’s non-executive chairman of $240,000 for 2012 and 2013 was below the median compensation for non-executive chairmen at large companies in the NACD Director Compensation Report.
Based on the competitive data, management recommended to the compensation committee ~~recommended,~~that the non-executive chairman’s additional retainer be increased from $75,000 to $90,000, effective June 1, 2013, which on an annual basis would reduce the difference between our non-executive chairman’s 2013 total direct compensation and the median total direct compensation for non-executive chairman at large companies in the NACD Director Compensation Report. The compensation committee and the board of directors approved ~~that no changes be made~~the increase in the non-executive chairman’s additional retainer, resulting in an increase in his total direct compensation from $240,000 annually to ~~director compensation for 2012. With respect to~~$255,000 annually. The non-executive chairman of the board was not present during the compensation ~~comparison to other directors, the multiple~~committee’s discussion of the ~~median non-executive director total pay for~~report developed by the ~~company was 1.45X as compared to 1.64X under~~human resources department and did not vote in approving the National Association of Corporate Directors 2011/2012 Director Compensation Report companies and 1.84X for the peer companies. The compensation committee recommended, and the board approved, that no changes be made to the non-executive chairman of the board compensation for 2012.recommendation.
~~Stockholder Communications~~
MDU Resources Group, Inc. Proxy Statement
Stockholders and other interested parties who wish to contact the board of directors or an individual director, including our non-employee chairman or non-employee directors as a group, should address a communication in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650. The secretary will forward all communications.
57

Proxy Statement

Stockholder Communications
Stockholders and other interested parties who wish to contact the board of directors or an individual director, including our non-employee chairman or non-employee directors as a group, should address a communication in care of the secretary at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650. The secretary will forward all communications.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
~~Section16~~Section 16 of the Securities Exchange Act of 1934, as amended, requires that officers, directors, and holders of more than 10% of our common stock file reports of their trading in our equity securities with the Securities and Exchange Commission. Based solely on a review of Forms 3, 4, and 5 and any amendments to these forms furnished to us during and with respect to ~~2012~~2013 or written representations that no Forms 5 were required, we believe that all such reports were timely filed, except that ~~one~~in August 2013, Mr. Dennis L. Haider filed an amended Form ~~4 for Mr. Lewis reporting one transaction was~~3 to report ownership of 3,059 additional shares held in the company’s direct registration system that were omitted from his original Form 3 filed ~~one week late.~~in June 2013.
CONDUCT OF MEETING; ADJOURNMENT~~ADJOURNMENT~~
The chairman of the board has broad responsibility and authority to conduct the annual meeting in an orderly and timely manner. In addition, our bylaws provide that the meeting may be adjourned from time to time by the chairman of the meeting regardless of whether a quorum is present.

58
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

OTHER BUSINESS
Neither the board of directors nor management intends to bring before the meeting any business other than the matters referred to in the notice of annual meeting and this proxy statement. We have not been informed that any other matter will be presented at the meeting by others. However, if any other matters are properly brought before the annual meeting, or any adjournment(s) thereof, your proxies include discretionary authority for the persons named in the enclosed proxy to vote or act on such matters in their discretion.
~~SHARE~~DSHARED ADDRESS STOCKHOLDERS
In accordance with a notice sent to eligible stockholders who share a single address, we are sending only one annual report to stockholders and one proxy statement to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a stockholder of record wishes to receive a separate annual report to stockholders and proxy statement in the future, he or she may contact the office of the treasurer at MDU Resources Group, Inc., P.O. Box 5650, Bismarck, ND 58506-5650, Telephone Number: (701) 530-1000. Eligible stockholders of record who receive multiple copies of our annual report to stockholders and proxy statement can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker, or other nominee can request householding by contacting the nominee.

We hereby undertake to deliver promptly, upon written or oral request, a separate copy of the annual report to stockholders and proxy statement to a stockholder at a shared address to which a single copy of the document was delivered.
~~201~~42015 ANNUAL MEETING OF STOCKHOLDERS
Director Nominations:Our bylaws ~~providethat~~provide that director nominations may be made only by (i) the board at any meeting of stockholders or (ii) at an annual meeting by a stockholder entitled to vote for the election of directors and who has complied with the procedures established by the bylaws. For a nomination to be properly brought before an annual meeting by a stockholder, the stockholder intending to make the nomination must have given timely and proper notice of the nomination in writing to the corporate secretary in accordance with and containing all information and the completed questionnaire provided for in the bylaws. To be timely, such notice must be delivered to or mailed to the corporate secretary and received at our principal executive offices not later than 90 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. For purposes of our annual meeting of stockholders expected to be held April ~~22, 2014,~~28, 2015, any stockholder who wishes to submit a nomination must submit the required notice to the corporate secretary on or before January ~~23, 2014.~~22, 2015.
58
MDU Resources Group, Inc. Proxy Statement

Proxy Statement
Other Meeting Business:Our bylaws also ~~providethat~~provide that no business may be brought before an annual meeting except (i) as specified in the meeting notice given by or at the direction of the board, (ii) as otherwise properly brought before the meeting by or at the direction of the board, or (iii) properly brought before the meeting by a stockholder entitled to vote who has complied with the procedures established by the bylaws. For business to be properly brought before an annual meeting by a stockholder (other than nomination of a person for election as a director which is described above) the stockholder must have given timely and proper notice of such business in writing to the corporate secretary, in accordance with, and containing all information provided for in the bylaws and such business must be a proper matter for stockholder action under the General Corporation Law of Delaware. To be timely, such notice must be delivered or mailed to the corporate secretary and received at our principal executive offices not later than the close of business 90 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. For purposes of our annual meeting expected to be held April ~~22, 2014,~~28, 2015, any stockholder who wishes to bring business before the meeting (other than nomination of a person for election as a director which is described above) must submit the required notice to the corporate secretary on or before January ~~23, 2014.~~22, 2015.
Discretionary Voting:~~Rule14a-4~~ Rule 14a-4 of the Securities and Exchange Commission’s proxy rules allows us to use discretionary voting authority to vote on matters coming before an annual stockholders’ meeting if we do not have notice of the matter at least 45 days before the anniversary date on which we first mailed our proxy materials for the prior year’s annual stockholders’ meeting or the date specified by an advance notice provision in our bylaws. Our bylaws contain an advance notice provision that we have described above. For our annual meeting of stockholders expected to be held on April ~~22, 2014,~~28, 2015, stockholders must submit such written notice to the corporate secretary on or before January ~~23, 2014.~~22, 2015.
~~MDU Resources Group, Inc.Proxy Statement~~
59

~~Proxy Statement~~
Stockholder Proposals: The requirements we describe above are separate from and in addition to the Securities and Exchange Commission’s requirements that a stockholder must meet to have a stockholder proposal included in our proxy statement under Rule 14a-8 of the Exchange Act. For purposes of our annual meeting of stockholders expected to be held on April ~~22, 2014,~~28, 2015, any stockholder who wishes to submit a proposal for inclusion in our proxy materials must submit such proposal to the corporate secretary on or before November ~~13, 2013.~~12, 2014.
Bylaw Copies:You may ~~obtaina~~obtain a copy of the full text of the bylaw provisions discussed above by writing to the corporate secretary. Our bylaws are also available on our website at: http://www.mdu.com/~~Governance/Pages/CorporateGovernanceGuidelines.aspx.~~proxystatement/corporate-bylaws.
We will make available to our stockholders to whom we furnish this proxy statementa copy of our Annual Report on Form 10-K, excluding exhibits, for the year ended December 31, ~~2012,~~2013, which is required to be filed with the Securities and Exchange Commission. You may obtain a copy, without charge, upon written or oral request to the Office of the Treasurer of MDU Resources Group, Inc., 1200 West Century Avenue, Mailing Address: P.O. Box5650,, Bismarck, ND 58506-5650, Telephone Number: (701) 530-1000. You may also access our Annual Report on Form 10-K through our website at~~www.mdu.com~~. www.mdu.com.

By order of the Board of Directors,

~~PaulK.~~Paul K. Sandness

Secretary

~~March 13, 2013~~March 12, 2014

60
MDU Resources Group, Inc.Proxy Statement
59

Proxy Statement

EXHIBIT A

Towers Watson ~~2010~~2011 CDB

~~Avanade~~Carnival

~~CH Energy Group~~Fiserv
General Industry ~~Executive~~

~~Avis Budget Group~~Carpenter Technology

~~CH2M Hill~~Fluor
~~Compensation~~Executive Database

~~Avista~~Caterpillar

~~Chemtura~~Ford

~~AXA Group~~CDI

~~Chevron~~Fortune Brands

~~B&W Technical Services Y-12~~CF Industries

~~Chevron Phillips Chemical~~GAF Materials
3M

~~Ball~~CGI Technologies & Solutions

~~Chiquita Brands~~
~~7-Eleven~~
~~Bank of America~~
~~Choice Hotels International~~
~~A&P~~
~~Bank of Hawaii~~
~~CHS~~
~~A.H. Belo~~
~~Bank of New York Mellon~~
~~CIGNA~~Gavilon
A.O. Smith

~~Bank of the West~~Chattem

~~Cimarex Energy~~
~~A. T. Cross~~
~~Barnes Group~~
~~Cintas~~
~~AAA Northern California, Nevada & Utah~~
~~Barrick Gold of North America~~
~~Cisco Systems~~
~~AAA of Science~~
~~Baxter International~~
~~CIT Group~~General Atomics
Abbott Laboratories

~~Bayer AG~~Chemtura

~~Cleco~~General Dynamics
~~ABC~~AbitibiBowater

~~Bayer CropScience~~Chiquita Brands

~~Cliffs Natural Resources~~General Mills
Accenture

~~Bayer MaterialScience~~Choice Hotels International

~~CMS Energy~~General Motors
ACH Food

~~BB&T~~Chrysler

~~CNA~~Genzyme
Acuity Brands

~~BBVA~~CHS

~~COACH~~GlaxoSmithKline
~~AEGON~~Adecco

BDCisco Systems

~~Cobank~~Goodman Manufacturing
~~AEI Services~~Aerojet

~~Beckman Coulter~~Cliffs Natural Resources

~~Coca-Cola~~
~~Aeropostale~~
~~Belo~~
~~Colgate-Palmolive~~
~~AFLAC~~
~~Bemis~~
~~Colorado Springs Utilities~~Goodrich
Agilent Technologies

~~Best Buy~~COACH

~~Columbia Sportswear~~Google
Agrium

~~BG US Services~~Coca-Cola

~~Comcast~~
~~AIG~~
~~Big Lots~~
~~Comerica~~Graco
Air Liquide

~~Bill & Melinda Gates Foundation~~Coca-Cola Enterprises

~~Commerce Bancshares~~Greif
Air Products and Chemicals

~~Biogen Idec~~Coinstar

~~Commerce Insurance~~
~~Alcatel-Lucent~~
~~BJ’s Wholesale Club~~
~~ConAgra Foods~~Grupo Ferrovial
Alcoa

~~Black Hills Power and Light~~Colgate-Palmolive

~~Connell Limited Partnership~~GSI Commerce
Alcon Laboratories

~~Blockbuster~~Comcast

~~ConocoPhillips~~GTECH H.B. Fuller
Alexander & Baldwin

~~Blue Cross Blue Shield of Florida~~ConAgra Foods

~~Conseco~~
~~Allegheny Energy~~
~~Blyth~~
~~Consolidated Edison~~
~~Allergan~~
~~Boehringer Ingelheim~~
~~Constellation Energy~~
~~Allete~~
~~Boeing~~
~~Consumers Union~~
~~Alliant Energy~~
~~BOK Financial~~
~~Continental Automotive Systems~~Hanesbrands
Alliant Techsystems

~~Boston Scientific~~Continental Automotive Systems

~~ConvaTec~~
~~Allianz~~
~~Bovis Lend Lease~~
~~Convergys~~
~~Allstate~~
BP
~~Cooper Industries~~
~~Allured Business Media~~
~~Brady~~
~~Corning~~
~~Amazon.com~~
~~Bremer Financial~~
~~Covance~~
~~Ameren~~
~~Bristol-Myers Squibb~~
~~Covanta Holdings~~
~~American Chemical Society~~
~~Broadcom~~
~~Covidien~~Harland Clarke
American Crystal Sugar

~~Burlington Northern Santa Fe~~ConvaTec

~~Cox Enterprises~~Harley-Davidson
American ~~Electric Power~~Sugar Refining

~~Bush Brothers~~Convergys

~~CPS Energy~~Harman International Industries
~~American Express~~AMERIGROUP

~~C.H. Robinson Worldwide~~Cooper Industries

~~Cracker Barrel Old Country Stores~~Hasbro
~~American Family Insurance~~AmerisourceBergen

CACoreLogic

~~Crown Castle~~
~~American United Life~~
~~Cablevision Systems~~
~~Crump Group~~
~~American Water Works~~
~~Cabot~~
~~CSR~~
~~Ameriprise Financial~~
~~Cadbury~~
~~CSX~~
~~Ameritrade~~
~~Calgon Carbon~~
~~CUNA Mutual~~
~~Ameron~~
~~California Independent System Operator~~
~~CVS Caremark~~Haynes International
AMETEK

~~Callaway Golf~~Corning

~~Cytec~~HBO
Amgen

~~Calpine~~Covance

~~Daiichi Sankyo~~
~~Anadarko Petroleum~~
~~Cameron International~~
~~Dana~~HD Supply
Ann Taylor Stores

~~Capital One Financial~~Covidien

~~Dannon~~Headway Technologies
AOL
~~Capitol Broadcasting – WRAL~~
~~Darden Restaurants~~
APL

~~Cardinal Health~~CSR

~~Day & Zimmermann~~Herman Miller
Appleton Papers

~~Career Education~~CSX

~~DCP Midstream~~Hershey
Applied Materials

~~CareFusion~~Curtiss-Wright

~~Dean Foods~~Hertz
ARAMARK

~~Cargill~~CVS Caremark

~~Del Monte Foods~~
~~Archer Daniels Midland~~
~~Carlson Companies~~
~~Dell~~
~~Arctic Cat~~
~~Carnival~~
~~Delta Air Lines~~
~~Areva~~
~~Carpenter Technology~~
~~Deluxe~~Hewlett-Packard
Armstrong World Industries

~~Catalent Pharma Solutions~~Cytec

~~Denny’s~~Hexcel
Arrow Electronics

~~Catholic Healthcare West~~Daiichi Sankyo

~~Dentsply~~Hilton Worldwide
Ashland
Daimler Trucks North America
Hitachi Data Systems
AstraZeneca

~~Cedar Rapids TV~~Dannon

~~Devon Energy~~HNI HNTB
AT&T

~~Celgene~~Darden Restaurants

~~Devry~~
~~ATC Management~~
~~Cemex~~
~~Dex One~~
~~Atmos Energy~~
~~CenterPoint Energy~~
~~Diageo North America~~
~~Aurora Healthcare~~
~~CenturyLink~~
~~Dionex~~
~~Auto Club Group~~
~~Cephalon~~
~~Direct Energy~~Hoffmann-La Roche
Automatic Data Processing

~~CF Industries~~Dassault Systems

~~Disney~~Holcim
Avery Dennison
Day & Zimmermann
Home Depot
Avis Budget Group
Dean Foods
Honeywell
BAE Systems
Deckers Outdoor
Hormel Foods
Ball
Dell
Hostess Brands
Barnes Group
Delta Air Lines
Houghton Mifflin Harcourt Publishing ~~Worldwide~~
Battelle Memorial Institute
Deluxe
Hunt Consolidated
Baxter International
Dentsply
Huron Consulting Group
Bayer AG
Dex One
Husky Injection Molding Systems
Bayer CropScience
Diageo North America
Hyatt Hotels
Beckman Coulter
Dollar Tree Stores
IBM
Belo
Domtar
IDEXX Laboratories
Bemis
Donaldson
IKON Office Solutions
Benjamin Moore
Dow Corning
Illinois Tool Works
Best Buy
DuPont
IMS Health
Big Lots
Eastman Chemical
Ingersoll Rand
Boeing
Eastman Kodak
Intel
Boston Scientific
Eaton
Intercontinental Hotels
Bovis Lend Lease
eBay
International Flavors & Fragrances
Brady
Ecolab
International Paper
Bristol-Myers Squibb
Eli Lilly
Interpublic Group
Broadridge Financial Solutions
EMC
Intrepid Potash
Brown-Forman
EMD Millipore
Invensys Controls
Bucyrus International
Endo Pharmaceuticals
ION Geophysical
Bunge
Equifax
Irvine Company
Burlington Northern Santa Fe
Equity Office Properties
ITT
Bush Brothers
Ericsson
ITT Mission Systems
CA
Estee Lauder
J.M. Smucker
Calgon Carbon
Evergreen Packaging
J.R. Simplot
Cameron International
Experian Americas
Jabil Circuit
Cardinal Health
Express Scripts
Jack in the Box
Cargill
Fair Isaac
JetBlue
Carlson Companies
Federal-Mogul
JM Family Enterprises
Carmeuse North America Group
Fidelity National Information Services
Johns-Manville

MDU Resources Group, Inc.Proxy Statement
A-1

Proxy Statement

~~Dominion Resources~~Johnson & Johnson

~~FPL~~Performance Food Group

~~HR Access~~Thermo Fisher Scientific
~~Domtar~~Johnson Controls

~~Franklin Resources~~PerkinElmer

~~HSBC Holdings~~Thomas & Betts
~~Donaldson~~Kaman Industrial Technologies

~~Freddie Mac~~Pfizer

~~Hubbard Broadcasting~~Time Warner
~~Dow~~Kansas City Southern
Pitney Bowes
Time Warner Cable
Kao Brands
Plexus
Timken
KBR Kellogg
Polaris Industries
T-Mobile USA
Kimberly-Clark
Potash
Toro
Kinetic Concepts
PPG Industries
Total System Services
Kinross Gold
Praxair
Travelport
Koch Industries
ProBuild Holdings
Trident Seafoods
Kohler
Pulte Homes
TRW Automotive
Komatsu America
Purdue Pharma
Tupperware
L-3 Communications
QUALCOMM
Tyson Foods
Land O’Lakes
Quintiles
U.S. Foodservice Underwriters Laboratories
Level 3 Communications
R.R. Donnelley
Unilever United States
Lexmark International
Ralcorp Holdings
Union Pacific
Life Technologies
Reader’s Digest
Unisys
Linde
Realogy
United Rentals
Lockheed Martin
Reddy Ice
United States Cellular
Lorillard Tobacco
Regal-Beloit
United States Steel
Lubrizol
Regency Centers
United Technologies
Lyondell Chemical

~~Freedom Communications~~Rent-A-Center

~~Humana~~URS Energy & Construction
~~Dow Corning~~Magellan Midstream Partners

~~Freeport-McMoRan Copper & Gold~~Research in Motion

~~Hunt Consolidated~~USG
~~Dow Jones~~ManTech International

~~Future US~~Ricardo

~~Huntington Bancshares~~UTi Worldwide
~~DPL~~Marriott International

~~GAF~~Rio Tinto
Valero Energy
Martin Marietta Materials

~~Huntsman~~
~~DTE Energy~~Roche Diagnostics

~~Gannett~~Vangent
Mary Kay

~~Husky Injection Molding Systems~~
~~Duke Energy~~Rockwell Automation

~~Gap~~Verde Realty
Mattel

~~Hyatt Hotels~~
~~DuPont~~Rockwell Collins

~~GATX~~Verizon
Matthews International

~~IBM~~
~~E.ON U.S.~~Ryder System

~~Gavilon~~Viacom
McClatchy

~~IDACORP~~
~~E.W. Scripps~~Safety-Kleen Systems

~~GDF SUEZ~~ Vision Service Plan
McDonald’s
SAIC
Visteon
McGraw-Hill
Sanofi-Aventis
Vulcan Materials
McKesson
SCA Americas
VWR International
MDC Holdings
Schreiber Foods
Walt Disney
MeadWestvaco
Schwan’s
Waste Management
Media General
Scotts Miracle-Gro
Wendy’s/Arby’s Group
Medicines Company
Scripps Networks Interactive
Weyerhaeuser
Medtronic
Seagate Technology
Whirlpool
Merck & Co.
Sealed Air
Wilsonart International
Microsoft
ServiceMaster
Winnebago Industries
Milacron
ShawCor
Wm. Wrigley Jr.
Mitsubishi Power Systems Americas
Sherwin-Williams
Wyndham Worldwide
Molson Coors Brewing
Siemens AG
Xerox
Momentive Specialty Chemicals
Sigma-Aldrich
YRC Worldwide
Monsanto
Smith & Nephew
Yum! Brands
Mosaic
Snap-On
Motorola Mobility
Sodexo
Motorola Solutions
Sonoco Products
Towers Watson 2011 CDB
Murphy Oil
Space Systems Loral
Energy Services
MWH Global
Spirit AeroSystems
Executive Database
Navistar International
SprintNextel
NCR
SPX
Acciona
Nestlé USA
SRA International
AGL Resources
Newmont Mining
Stantec
Allete
NewPage
Starbucks
Alliant Energy
Nissan North America

~~IDEXX Laboratories~~
~~Eastman Chemical~~StarTek

~~General Atomics~~Ameren
Nokia

~~IKON Office Solutions~~
~~Eaton~~Starwood Hotels & Resorts

~~General Dynamics~~American Electric Power
Noranda Aluminum

~~IMS Health~~
~~Ecolab~~Statoil

~~General Electric~~Areva
Norfolk Southern

~~Independence Blue Cross~~
~~Edison International~~Steelcase

~~General Mills~~ATC Management
Novartis

~~Infragistics~~
~~Education Management~~Stryker

~~General Motors~~Avista
Novartis Consumer Health

~~ING~~
~~Eisai~~Sulzer Pumps US

~~Genworth Financial~~BG US Services
Novo Nordisk Pharmaceuticals

~~Integrys Energy Group~~
~~El Paso Corporation~~
~~Genzyme~~
~~Intel~~
~~Electric Power Research Institute~~
~~Getty Images~~
~~Intercontinental Hotels~~
~~Eli Lilly~~
~~Gilead Sciences~~
~~International Data~~
~~EMC~~
~~GlaxoSmithKline~~
~~International Flavors & Fragrances~~
~~EMCOR Group~~
~~GMAC Financial Services~~
~~International Paper~~
~~Emergency Medical Services~~
~~Goodrich~~
~~Invensys Controls~~
~~EMI Music~~
~~Goodyear Tire & Rubber~~
~~ION Geophysical~~
~~Enbridge Energy~~
~~Google~~
~~Iron Mountain~~
~~Energen~~
~~Gorton’s~~
~~Irvine Company~~
~~Energy Future Holdings~~
~~Graco~~
~~Irving Oil Commercial G.P~~
~~Energy Northwest~~
~~Great-West Life Annuity~~
~~ISO New England~~
~~Entergy~~
~~Greif~~
~~iSoft~~
~~EPCO~~
~~Gruma~~
~~ISP~~
~~Epson~~
~~Grupo Ferrovial~~
~~ITT – Corporate~~
~~Equifax~~
~~GSM Association~~
~~J. Crew~~
~~Equity Office Properties~~
~~GTECH~~
~~J.C. Penney Company~~
~~ERCOT~~
~~Guardian Life~~
~~J.M. Smucker~~
~~Erie Insurance~~
~~Guideposts~~
~~J.R. Simplot~~
~~Ernst & Young~~
~~GXS~~
~~Jabil Circuit~~
~~ESPN~~
~~H&R Block~~
~~Jack in the Box~~
~~Essilor of America~~
~~H.B. Fuller~~
~~Jacobs Engineering~~
~~Evening Post Publishing – KOAA~~
~~H.J. Heinz~~
~~JM Family~~
~~Evergreen Packaging~~
~~Hanesbrands~~
~~John Hancock~~
~~Evonik Degussa~~
~~Hannaford~~
~~Johnson & Johnson~~
~~Exelon~~
~~Harland Clarke~~
~~Johnson Controls~~
~~Express Scripts~~
~~Harley-Davidson~~
~~Journal Broadcast Group~~
~~Exterran~~
~~Harris Bank~~
~~Kaiser Foundation Health Plan~~
~~ExxonMobil~~
~~Harris Enterprises~~
~~Kalmbach Publishing~~
~~Fair Isaac~~
~~Harry Winston~~
~~Kaman Industrial Technologies~~
~~Fairchild Controls~~
~~Hartford Financial Services~~
~~Kao Brands~~
~~FANUC Robotics America~~
~~Hasbro~~
~~KBR~~
~~Farmers Group~~
~~Hawaiian Electric~~
~~Kellogg~~
~~Federal Home Loan Bank of San Francisco~~
~~HBO~~
~~KeyCorp~~
~~Federal Reserve Bank of Atlanta~~
~~HCA Healthcare~~
~~Kimberly-Clark~~
~~Federal Reserve Bank of Cleveland~~
~~HD Supply~~
~~Kinder Morgan~~
~~Federal Reserve Bank of Dallas~~
~~Health Net~~
~~Kindred Healthcare~~
~~Federal Reserve Bank of Philadelphia~~
~~Healthways~~
~~King Pharmaceuticals~~
~~Federal Reserve Bank of San Francisco~~
~~Henkel of America~~
~~Kinross Gold~~
~~Federal Reserve Bank of St. Louis~~
~~Henry Ford Health Systems~~
~~KLA-Tencor~~
~~Ferderal-Mogul~~
~~Herman Miller~~
~~Knowles Electronics~~
~~Ferrellgas~~
~~Hershey~~
~~Koch Industries~~
~~Fidelity Investments~~
~~Hertz~~
~~Kohler~~
~~Fidelity National Information Services~~
~~Hess~~
~~Kohl’s~~
~~Fifth Third Bancorp~~
~~Hewlett-Packard~~
~~KPMG~~
~~Fireman’s Fund Insurance~~
~~Highmark Blue Cross Blue Shield~~
~~L.L. Bean~~
~~First Horizon National~~
~~Hilton Worldwide~~
~~L-3 Communications~~
~~First Solar~~
~~Hitachi~~SunGard Data Systems

~~Lafarge North America~~Black Hills
~~FirstEnergy~~Nypro

~~HNI~~Sunoco

~~Lance~~California Independent System Operator
~~Fiserv~~Occidental Petroleum

~~HNTB~~Sunovion Pharmaceuticals

~~Land O’Lakes~~Calpine
~~Fisher Communications~~Office Depot

~~Hoffmann-La Roche~~SuperValu Stores

~~Lanxess~~CenterPoint Energy
~~Flowserve~~Omnicare

~~Home Shopping Network~~Swagelok

~~Laureate Education~~CH Energy Group
~~Fluor~~Orange Business Services

~~Honeywell~~Syngenta Crop Protection

~~Lear~~Cleco
~~Ford~~Oshkosh

~~Horizon Blue Cross Blue Shield of New~~Takeda Pharmaceutical

~~Leggett and Platt~~CMS Energy
~~Forest Laboratories~~Overhead Door

~~Jersey~~Taubman Centers

~~LES~~Colorado Springs Utilities
~~Fortune Brands~~Owens Corning

~~Hormel Foods~~TE Connectivity

~~Level 3 Communications~~Consolidated Edison
~~Forum Communications – WDAY~~Owens-Illinois

~~Hospira~~Tektronix

~~Levi Strauss~~Constellation Energy
~~Fox Networks Group~~Oxford Industries

~~Houghton Mifflin Harcourt Publishing~~Temple-Inland

~~Liberty Mutual~~Covanta Holdings
Panasonic of North America
Teradata
CPS Energy
Parker Hannifin
Terex
Crosstex Energy
Parsons
Textron

A-2
MDU Resources Group, Inc.Proxy Statement

Proxy Statement

~~Life Technologies~~DCP Midstream

~~New York Times~~TransCanada

~~Praxair~~Blue Cross of Northeastern Pennslyvania
~~Lincoln Financial~~Dominion Resources

~~New York University~~UIL Holdings

~~Premera~~ Blue Cross of Idaho
~~Lockheed Martin~~DPL

~~Newmont Mining~~UniSource Energy

~~Principal Financial~~Bosch Rexroth
~~Loews~~DTE Energy

~~NewPage~~Unitil

~~PrivateBancorp~~Boyd Gaming
~~LOMA~~Duke Energy

~~Nicor~~Vectren

~~Progress Energy~~Boy Scouts of America
~~Lorillard Tobacco~~Edison International

~~Nielsen Expositions~~Westar Energy

~~Progressive~~Bradley
EDP Renewables North America LLC
Westinghouse Electric
Brady
El Paso Corporation
Williams Companies
Bridgepoint Education
El Paso Electric
Wisconsin Energy
Briggs & Stratton
Enbridge Energy
Wolf Creek Nuclear
Brightpoint North America
Energen
Xcel Energy
Brookdale Senior Living
Energy Future Holdings
Brownells
Energy Northwest
Bryant University
Entergy
Towers Watson 2011 CSR Report
Buffets
EQT Corporation
on Top Management Compensation
Cablevision Systems
ERCOT
Caelum Research Corporation
Exelon
AAA
Caesar’s Entertainment
FirstEnergy
AAR Corporation
California Casualty Management
First Solar
ABB
California Dental Association
GenOn Energy
ABX Air
California Institute of Technology
Hawaiian Electric
Acuity
CareFirst BlueCross BlueShield
Iberdrola Renewables
Acushnet
Carle Foundation Hospital
IDACORP
Advance Auto Parts
Carlson
Integrys Energy Group
Adventist Health System
CarMax
IPR – GDF SUEZ North America
AEGON
Carpenter Technology
ISO New England
AFLAC
CB Richard Ellis
Kinder Morgan
AgFirst
Cell Therapeutics
LES
Alfa Laval
CEMEX
LG&E and KU Energy Services
Allegiance Health
CEVA Logistics
Lower Colorado River Authority

~~NIKE~~Allete

~~Proliance Energy~~
~~LPL Financial~~
~~Nissan North America~~
~~Protective Life~~
~~Lyondell Chemical~~
~~Nokia~~
~~Providence Health & Services~~
~~M&T Bank~~
~~Noranda Aluminum~~
~~Prudential Financial~~
~~MAG Industrial Automation Systems~~
~~Norfolk Southern~~
Chelan County Public ~~Service Enterprise Group~~
~~Magellan Midstream Partners~~
~~Northeast Utilities~~
~~Puget Energy~~
~~Marathon Oil~~
~~Northern Power Systems~~
~~Pulte Homes~~
~~Marriott International~~
~~Northrop Grumman~~
~~Purdue Pharma~~
~~Marsh & McLennan~~
~~Northstar Travel Media~~
~~QUALCOMM~~
~~Marshall & Ilsley~~
~~NorthWestern Energy~~
~~Quest Diagnostics~~
~~Martin Marietta Materials~~
~~Northwestern Mutual~~
~~Quintiles~~
~~Mary Kay~~
~~NOVA Chemicals~~
~~R.R. Donnelley~~
~~Masco~~
~~Novartis~~
~~Ralcorp Holdings~~
~~Massachusetts Mutual~~
~~Novartis Consumer Health~~
~~Razorfish~~
~~MasterCard~~
~~Novell~~
~~RBC – US~~
~~Mattel~~
~~Novo Nordisk Pharmaceuticals~~
~~Reader’s Digest~~
~~Matthews International~~
~~NRG Energy~~
~~Realogy~~
~~McClatchy~~
~~NSTAR~~
~~Redcats USA~~Utility District
McDermott

~~NV Energy~~Alta Resources

~~Reddy Ice~~
~~McDonald’s~~
~~NW Natural~~
~~Redknee Solutions~~
~~McGraw-Hill~~
~~NXP Semi-Conductor~~
~~Reed Business~~
~~McKesson~~
~~Nycomed US~~
~~Regency Energy Partners LP~~Chicago Transit Authority
MDU Resources

~~Nypro~~Altegrity

~~Regions Financial~~Chickasaw Nation
~~MeadWestvaco~~
~~Occidental Chemical~~
~~Research in Motion~~
~~Mecklenburg County~~
~~Occidental Petroleum~~
~~Revlon~~
~~Media General~~
~~Office Depot~~
~~RF Micro Devices~~
~~Media Tec Publishing~~
~~OGE~~MGE Energy

~~RGA Reinsurance Group~~
~~Medicines Company~~American Cancer Society

~~Oglethorpe Power~~Chico’s FAS
MidAmerican Holdings

~~Rio Tinto~~
~~MedImmune~~American Career College

~~Oklahoma Today Magazine~~Children’s Healthcare of Atlanta
Midwest Independent Transmission

~~Roche Diagnostics~~
~~Medtronic~~American Enterprise

~~Omaha Public Power~~
~~Rockwell Automation~~Choice Hotels International
~~Merck & Co~~
~~Omgeo~~
~~Rockwell Collins~~
~~Meredith~~
~~OneBeacon Insurance~~
~~Rodale Press~~
~~MetLife~~
~~Open Text USA~~
~~RRI Energy~~
~~Microsoft~~
~~Orange Business Services~~
~~Ryder System~~
~~Midwest Independent~~
~~Oshkosh~~
~~S.C. Johnson~~
~~Transmission~~ System Operator

~~Owens Corning~~American Greetings

~~Safety-Kleen Systems~~
~~Milacron~~
~~Owens-Illinois~~
~~SAIC~~
~~Millennium Inorganic Chemicals~~
~~Pacific Gas & Electric~~
~~Salt River Project~~
~~Millipore~~
~~Pacific Life~~
~~SanDisk~~
~~Mine Safety Appliances~~
~~Parametric Technology~~
~~Sanofi Pasteur~~
~~Mirant~~
~~Parker Hannifin~~
~~Sanofi-Aventis~~
~~Mizuno USA~~
~~Parsons~~
~~Santee Cooper~~
~~Molson Coors Brewing~~
~~Pearson~~
~~Sarkes Tarzian – KTVN~~
~~Molycorp Minerals~~
~~PennWell~~
~~Sarkes Tarzian – WRCB~~
~~MoneyGram International~~
~~Penton Media~~
~~SAS Institute~~
~~Monsanto~~
~~People’s Bank~~
~~Saturday Evening Post~~
~~Moody’s~~
~~Pepco Holdings~~
~~Saudi Arabian Oil~~
~~Morgan Murphy Stations – WISC~~
~~PepsiCo~~
~~Savannah River Nuclear Solutions~~
~~Mosaic~~
~~PerkinElmer~~
~~Savannah River Remediation~~
~~Motorola~~
~~Pervasive Software~~
~~SCA Americas~~
~~Munich Re Group~~
~~PetSmart~~
~~SCANA~~
~~Murphy Oil~~
~~Pfizer~~
~~Schlumberger~~
~~MWH Global~~
~~Phillips-Van Heusen~~
~~School Specialty~~
~~Nash-Finch~~
~~Phoenix Companies~~
~~Schreiber Foods~~
~~Nation~~
~~Pinnacle West Capital~~
~~Schurz – KYTV~~
~~National Geographic Society~~
~~Pitney Bowes~~
~~Schurz – WDBJ~~
~~National Renewable Energy Laboratory~~
~~Pittsburgh Corning~~
~~Schwan’s~~
~~National Starch Polymers Group~~
~~PJM Interconnection~~
~~Scripps Networks Interactive~~
~~Nationwide~~
~~PlainsCapital~~
~~Seagate Technology~~
~~Navistar International~~
~~Plexus~~
~~Sealed Air~~
~~Navy Federal Credit Union~~
~~PNC Financial Services~~
~~Securian Financial Group~~
~~Naylor~~
~~PNM Resources~~
~~Security Benefit Group~~
~~NBC Universal~~
~~Polaris Industries~~
~~Sempra Energy~~
~~NCCI Holdings~~
~~Polymer Group~~
~~Sensata Technologies~~
~~Nestle USA~~
~~PolyOne~~
~~Sensient Technologies~~
~~NetJets~~
~~Portland General Electric~~
~~Shell Oil~~CHS
New York Independent System Operator

~~Potash~~American Red Cross

~~Sherwin-Williams~~
~~New York Life~~
~~PPG Industries~~
~~Shire Pharmaceuticals~~CH2M Hill
New York Power Authority

American Textile
Chumash Employee Resource Center
NextEra Energy
American Water Works
CIGNA
Nicor
AmeriPride Services
City of Austin
Northeast Utilities
Ameristar Casinos
City of Chicago
NorthWestern Energy
Ames True Temper
City of Garland
NRG Energy
AMETEK/Advanced Measurement
City of Houston
NSTAR
Technology
City of Las Vegas
Nuscale Power
Amica Mutual Insurance
City of Philadelphia
NV Energy
Analytic Services (ANSER)
Classified Ventures
NW Natural
Andersen Corporation
Cleco
OGE Energy
ANH Refractories
ClubCorp
Oglethorpe Power
AOC
CNL Financial Group
Omaha Public Power
Asahi Kasei Plastics NA
Cobb County School District
Pacific Gas & Electric
Ascend Performance Materials
Coca-Cola Enterprises
Pepco Holdings
Assurant
College of St. Scholastica
Pinnacle West Capital
Aurora Healthcare
Colman Group
PJM Interconnection
Auto Club Group
Colorado Springs Utilities
PNM Resources
Automobile Club of Southern California
Colsa
Portland General Electric
Avis Budget Group
CommIT Enterprises
PPL

~~Siemens~~Avista
CommScope
Progress Energy
Barloworld Handling
Community Coffee
Proliance Holdings
Baxa
Community Health Network
Public Service Enterprise Group
Baxter International
Compressor Controls
Puget Energy
Baylor College of Medicine
Computer Sciences Consulting Group
Regency Energy Partners LP
Baylor Health Care System
Computer Task Group
Salt River Project
B Braun Medical
ConnectiCare Capital LLC
Santee Cooper
BE Aerospace
Core Laboratories
SCANA
Beam Global Spirits & Wine
Cornell University
SemGroup
Belk
Correctional Medical Services
Sempra Energy
Bemis
Country Financial
Southern Company Services
Beneficial Bank
Coventry Health Care
Southern Union Company
Berwick Offray
CPS Energy
Southwest Power Pool
Biomet
Cracker Barrel Old Country Stores
Spectra Energy
Black Hills
Crate & Barrel
STP Nuclear Operating
BlueCross BlueShield of Louisiana
Crown Castle
TECO Energy
BlueCross BlueShield of Nebraska
CUNA Mutual
Tennessee Valley Authority
BlueCross BlueShield of South Carolina
D&B
Trans Bay Cable
BlueCross BlueShield of Tennessee
Decurion

MDU Resources Group, Inc.Proxy Statement
A-3

Proxy Statement

~~Simpson~~Delta Dental Plan of Michigan
Gerdau AmeriSteel
J&J Worldwide Services
Denny’s
Gibraltar Steel Corporation
JM Family Enterprises
DENSO International
G&K Services
John Crane
DePaul University
Glatfelter
Johns Hopkins University
Devry
GNC
Johnson Controls
Dickstein Shapiro
Godiva Chocolatier
Johnson Financial Group
Diebold
Gold Eagle
Johnson Outdoors
Discover Financial Services
Graco
John Wiley & Sons
Doherty Employer Services
Graham Packaging
Joint Commission
Dollar General
Grande Cheese
Jones Lang LaSalle
Dollar Tree Stores
Grange Life Insurance
Joy Global
Domino’s Pizza
Great American Insurance
J.R. Simplot
Donaldson
Greyhound Lines
Kewaunee Scientific Corporation
DSC Logistics
Grinnell Mutual Reinsurance
Keystone Automotive Industries
Duke Realty
GROWMARK
Keystone Foods
Duke University & Health System
GTECH
KI
DuPont
GuideStone Financial Resources
Kindred Healthcare
Dupont Fabros Technology
Habitat for Humanity International
Kingston Technology
Dyn McDermott
Harman International Industries
Klein Tools
Edison Mission Energy
Harris County Hospital District
Komatsu America
Education Management
Harvard Vanguard Medical Associates
Kroger
Edward Jones
Harvey Industries
Laboratory Corporation of America
Edwards Lifesciences
Haynes International
Lake Region Medical
Elizabeth Arden
Hazelden Foundation
Lantech.com
EMCOR Group
HD Supply
Lawson Products
Emerson Climate Technologies
Health Care Services
Learning Care Group
Emerson Electric
HealthNow New York
Legal & General America
Enpro Industries (Fairbanks Morse Engine)
H.E.B. Grocery
Leggett and Platt
Erickson Retirement Communities
Hendrick Medical Center
Leo Burnett
Erie Insurance
Hendrickson International
LG&E and KU Energy Services
ESCO Technologies
Henry Ford Health Systems
Lieberman Research Worldwide
ESM
Herman Miller
Limited Brands
Esterline Technologies
Highlights for Children
Littelfuse
Etnyre International
Highmark
Little Lady Foods
Evraz
Hill Phoenix
L.L. Bean
Exel
Hilti
Logic PD
Express Scripts
Hilton Worldwide
Louisiana-Pacific
Fairfield Manufacturing

~~Trinity Industries~~
~~Towers Watson 2010 Energy~~
~~Sinclair Broadcast Group~~
~~Tronox~~
~~Industry Executive~~
~~Sirius XM Radio~~
~~TRW Automotive~~
~~Compensation Database~~
~~Skype~~
~~T-Systems~~
~~SLM~~
~~TUI~~
~~Smith & Nephew~~
~~Tupperware~~
~~AEI Services~~
~~Smurfit-Stone Container~~
~~Twin Cities Public Television – TPT~~
~~Allegheny Energy~~
~~Snap-on~~
~~Tyco Electronics~~
~~Allete~~
~~Sodexo~~
~~U.S. Bancorp~~
~~Alliant Energy~~
~~Solutia~~
~~U.S. Foodservice~~
~~Ameren~~
~~Solvay America~~
~~UIL Holdings~~
~~American Electric Power~~
~~Sonoco Products~~
~~Unifi~~
~~Areva~~
~~Sony Corporation~~
~~Unilever United States~~
~~ATC Management~~
~~SourceMedia~~
~~Union Bank of California~~
~~Atmos Energy~~
~~Southern Company Services~~
~~Union Pacific~~
~~Avista~~
~~Southern Maryland Electric Cooperative~~
~~UniSource Energy~~
~~BG US Services~~
~~Southern Union Company~~
~~Unisys~~
~~Black Hills Power and Light~~
~~Southwest Power Pool~~
~~United Airlines~~
~~California Independent System Operator~~
~~Spectra Energy~~
~~United Parcel Service~~
~~Calpine~~
~~Spirit AeroSystems~~
~~United Rentals~~
~~CenterPoint Energy~~
~~Sprint Nextel~~
~~United States Cellular~~
~~CH Energy Group~~
~~SPX~~
~~United States Steel~~
~~Cleco~~
~~SRA International~~
~~United Technologies~~
~~CMS Energy~~
~~Stanford University~~
~~United Water~~
~~Colorado Springs Utilities~~
~~Stantec~~
~~UnitedHealth~~
~~Consolidated Edison~~
~~Starbucks~~
~~Unitil~~
~~Constellation Energy~~
~~StarTek~~
~~University of Texas –~~
~~Covanta Holdings~~
~~Starwood Hotels & Resorts~~
~~M.D. Anderson Cancer Center~~
~~CPS Energy~~
~~State Farm Insurance~~
~~Unum Group~~
~~DCP Midstream~~
~~State Street~~
~~USAA~~
~~Direct Energy~~
~~Steelcase~~
~~USG~~
~~Dominion Resources~~
~~Sterling Bancshares~~
~~Valero Energy~~
~~DPL~~
~~Stop & Shop~~
~~Vectren~~
~~DTE Energy~~
~~STP Nuclear Operating~~
~~Verde Realty~~
~~Duke Energy~~
~~Stryker~~
~~Verizon~~
~~E.ON U.S.~~
~~Sun Life Financial~~
~~Vertex Pharmaceuticals~~
~~Edison International~~
~~SunTrust~~
VF
~~El Paso Corporation~~
~~Sunflower Broadcasting~~
~~Viacom~~
~~Electric Power Research Institute~~
~~Sunoco~~
~~Village Farms~~
~~Enbridge Energy~~
~~Sunrise Senior Living~~
~~Visa~~
~~Energen~~
~~SuperMedia~~
~~Vision Service Plan~~
~~Energy Future Holdings~~
~~Swagelok~~
~~Vistar~~
~~Energy Northwest~~
~~Sybron Dental Specialties~~
~~Visteon~~
~~Entergy~~
~~Synacor~~
~~Volvo Group North America~~
~~EPCO~~
~~Takeda Pharmaceutical Company Limited~~
~~Vulcan~~
~~ERCOT~~
~~Targa Resources~~
~~Vulcan Materials~~
~~Exelon~~
~~Target~~
~~VWR International~~
~~First Solar~~
~~Taubman Centers~~
~~Walt Disney~~
~~FirstEnergy~~
~~TD Bank Financial Group~~
~~Warnaco~~
~~FPL Group~~
~~Telefonica O2~~
~~Washington Post~~
~~GDF SUEZ Energy North America~~
~~Tellabs~~
~~Waste Management~~
~~Hawaiian Electric~~
~~Temple-Inland~~
~~Watson Pharmaceuticals~~
~~IDACORP~~
~~Tenet Healthcare~~
~~Watts Water Technologies~~
~~Integrys Energy Group~~
~~Tennessee Valley Authority~~
~~Webster Bank~~
~~ISO New England~~
~~Teradata~~
~~Wellcare Health Plans~~
~~Kinder Morgan~~
~~Terex~~
~~Wellpoint~~
~~LES~~
~~Tesoro~~
~~Wells Fargo~~Hines Interests

Lower Colorado River Authority
Farm Credit Bank of Texas ~~Petrochemicals~~

~~Wendy’s/Arby’s~~Hitachi America
Loyola University of Chicago
Farm Credit Foundations
HNI
Lozier
Farmland Foods
HNTB
LSG Sky Chefs
Federal Reserve Bank of Atlanta
Houston Metropolitan Transit Authority
Luck Stone
Federal Reserve Bank of Chicago
Hu-Friedy Manufacturing Company
Lutron Electronics
Federal Reserve Bank of Dallas
Humana
Luxottica Retail
Federal Reserve Bank of Minneapolis
Hunter Industries
La Macchia Enterprises
Federal Reserve Bank of Philadelphia
Hutchinson Technology
Magellan Health Services
Federal Reserve Bank of Richmond
Hyundai Capital America
Magna Seating
Federal Reserve Bank of St. Louis
Hyundai Motor America
Malco Products
Federal Reserve Board
Hyundai Motor Manufacturing of Alabama
Maricopa County Office of
FedEx Express
IDEX Corporation
Management & Budget
FedEx Ground
IDEXX Laboratories
Maricopa Integrated Health System
Ferguson Enterprises
II-VI
Marshfield Clinic
Fermi National Accelerator Laboratory
IKON Office Solutions
Mars North America
Ferrellgas
Indiana Farm Bureau Insurance
Mary Kay
First American
Infogroup
MasterBrand Cabinets
First Citizens Bank
Information Management Service
Master Lock
First Commonwealth Financial
Ingram Industries
Mayo Clinic
First Solar
Insperity
McCain Foods USA
Fiserv
Institute for Defense Analyses
McGladrey
Fiskars Brands
Integra Lifesciences Corporation
Medco Health Solutions
Fleetwood Group

~~MDU Resources~~
~~Textron~~Intertape Polymer Group

~~Westar~~Media General
Flexcon Company
Iron Mountain
Medica Health Plans
Flexible Steel Lacing
Irvine
Medical Group Management Assn
Fortune Brands
Isuzu Motors America
Mercedes-Benz Financial Services
Freeman Dallas
Ithaca College
Mercer University
Friendly Ice Cream
Ithaka Harbors
Merit Medical Systems
Froedtert Hospital
Itochu International
Merrill
Funeral Directors Life Insurance Company
ITT Industries – Information Systems
Methodist Healthcare System
Gaylord Entertainment
ITT Mission Systems
MetLife
General Dynamics Information Technology
Jabil Circuit
Metropolitan Atlanta Rapid Transit Authority
Genesis Energy

~~Midwest Independent Transmission System~~
~~Thermo Fisher Scientific~~Jackson Hewitt

~~Western Digital~~
~~Operator~~Miami Children’s Hospital
~~Thomas & Betts~~
~~Westinghouse Electric~~
~~Mirant~~
~~Thomas Publishing~~
~~Weyerhaeuser~~
~~New York Independent System Operator~~
~~Thomson Reuters~~
~~Whirlpool~~
~~New York Power Authority~~
~~Thrivent Financial for Lutherans~~
~~Whole Foods Market~~
~~Nicor~~
~~TIAA-CREF~~
~~Wisconsin~~GenOn Energy

~~Northeast Utilities~~
~~Time~~Jacobs Technology

~~Wm. Wrigley Jr.~~
~~NorthWestern Energy~~Mine Safety Appliances
~~Time Warner~~
~~Wolters Kluwer~~
~~NRG Energy~~
~~Time Warner Cable~~
~~Wray Edwin – KTBS~~
~~NSTAR~~
~~Timken~~
~~Wyndham Worldwide~~
~~NV Energy~~
~~T-Mobile USA~~
~~Xcel Energy~~
~~NW Natural~~
~~Toro~~
~~Yahoo!~~
~~OGE Energy~~
~~Total System~~Gentiva Health Services

~~Yankee Publishing~~Jarden

~~Oglethorpe Power~~Miniature Precision Comps
~~TransCanada~~Georg Fischer Signet

~~YRC Worldwide~~Jefferson Science Associates

~~Omaha Public Power~~Minnesota Management & Budget
~~TransUnion~~Georgia Institute of Technology

~~Yum! Brands~~J J Keller & Associates

~~Pacific Gas & Electric~~
~~Travelers~~
~~Zale~~
~~Pepco Holdings~~Missouri Department of Conservation

A-4
MDU Resources Group, Inc.Proxy Statement

Proxy Statement

~~Pinnacle West Capital~~
~~PJM Interconnection~~
~~PNM Resources~~
~~Portland General Electric~~
~~PPL~~
~~Progress Energy~~
~~Proliance Holdings~~
~~Public Service Enterprise Group~~
~~Puget Energy~~
~~Regency Energy Partners LP~~
~~RRI Energy~~
~~Salt River Project~~
~~Santee Cooper~~
~~SCANA~~
~~Sempra Energy~~
~~Southern Company Services~~
~~Southern Maryland Electric Cooperative~~
~~Southern Union Company~~
~~Southwest Power Pool~~
~~Spectra Energy~~
~~STP Nuclear Operating~~
~~Targa Resources~~
~~Tennessee Valley Authority~~
~~TransCanada~~
~~UIL Holdings~~
~~UniSource Energy~~
~~Unitil~~
~~Vectren~~
~~Westar Energy~~
~~Westinghouse Electric~~
~~Wisconsin Energy~~
~~Wolf Creek Nuclear~~
~~Xcel Energy~~

~~Effective Compensation, Inc.’s~~
~~2010 Oil & Gas~~
~~Compensation Survey~~

~~ANKOR Energy LLC~~
~~Antero Resources~~
~~Approach Resources Inc.~~
~~Aspect Holdings, LLC~~
~~Atinum E&P, Inc.~~
~~Atlas Energy Resources L.L.C.F~~
~~Berry Petroleum Company~~
~~Bill Barrett Corporation~~
~~Black Hills Corporation~~
~~BOPCO, L.P.~~
~~BreitBurn Energy Partners LP~~
~~Brigham Exploration Company~~
~~Browning Oil Company, Inc.~~
~~BTA Oil Producers, LLC~~
~~Cabot Oil & Gas Corporation~~
~~Cano Petroleum, Inc.~~
~~Carrizo Oil & Gas Inc.~~
~~Ceja Corporation~~
~~Chaparral Energy, L.L.C.~~
~~Chesapeake Energy Corporation~~
~~Cimarex Energy Co.~~
~~Comstock Resources~~
~~Cohort Energy Company (J-W Operating)~~
~~Concho Resources, Inc.~~
~~Consol Energy Inc.~~
~~Continental Resources, Inc.~~
~~Crimson Exploration, Inc.~~
~~Denbury Resources, Incorporated~~
~~Devon Energy Corporation~~
~~Duncan Oil, Inc.~~
~~Dynamic Offshore Resources, LLC~~
~~Eagle Rock Energy~~
~~EnCana Oil & Gas~~
~~Energen Resources Corporation~~
~~Energy Partners, Ltd.~~
~~Eni Petroleum Co. Inc.~~Missouri Department of Transportation

~~EOG Resources~~Professional Golfers’ Association of America
State Personnel Administration
Mitsubishi International
Progressive
St. Cloud Hospital
Mitsui U S A.
Project Management Institute
Steelcase
Molex
Prometric Inc
~~EQT Corporation~~
~~Equal~~
Sterilite
Moneris Solutions
Property Casualty Insurers
Sterling Bancshares
MSC Industrial Direct
Association of America
St. Jude Children’s Research Hospital
MTD Products
Publix Super Markets
St. Louis County Government
MTS Systems
Purdue Pharma
Stonyfield Farm
Mueller Water Products
QBE the Americas
St. Vincent Hospital
MultiPlan
QSC Audio Products
Subaru of Indiana Automotive
Mutual of Omaha
Qualex
Sykes Enterprises
Mylan
Qualis Health
Syncada
Nash-Finch
Quality Bicycle Products
Synthes
National Academies
Quest Diagnostics
Tastefully Simple
National Futures Association
QVC
Taubman
National Interstate Insurance
Radio One
Taylor
National Safety Council
RadioShack
TDS Telecom
Nature’s Sunshine Products
Recology
Tech Data
Navistar International
Regence Group
Technicolor
Navy Exchange Service Command
Regency Centers
Tecolote Research
NCCI Holdings
Regions Financial
Tele-Consultants
NCMIC
Reinsurance Group of America
Tennant Company
North Carolina State Employees’ Credit Union
Renaissance Learning
Texas Industries
Nebraska Public Power District
RiceTec
Texas Mutual Insurance
Neenah Paper
Rice University
Therma Tru
NewPage
Rich Products
Thule
New York Community Bank
Ricoh Electronics
Timberland
NextEra Energy ~~US Inc. (Altex Energy)~~
~~EXCO Resources, Inc.~~
~~Fasken Oil and Ranch, Ltd.~~
~~Fidelity Exploration & Production~~
~~FIML Natural Resources~~
~~Forest Oil Corporation~~
~~GMX Resources Inc.~~
~~Goodrich Petroleum Company of Louisiana~~
~~Great Western Drilling Company~~
~~Harvest Natural Resources, Inc.~~
~~Henry Resources LLC~~
~~HighMount Exploration & Production, LLC~~
~~Hilcorp Energy Company~~
~~Hillwood International Energy~~
~~Holmes Western Oil Corporation~~
~~J. M. Huber Corporation~~
~~Kinder Morgan CO2 Company L.P.~~
~~Lake Ronel Oil Company~~
~~Leed Petroleum LLC~~
~~Linn Operating, Inc.~~
~~Manti Resources~~
~~Mariner Energy, Inc.~~
~~Maritech Resources, Inc.~~
~~McElvain Oil & Gas Properties, Inc.~~
~~McMoran Oil and Gas Company~~
~~Medco Petroleum Management LLC~~
~~Merit Energy Company~~
~~Mewbourne Oil Company~~
~~Murchison Oil & Gas Inc.~~
~~Mustang Fuel Corporation~~
~~Nations Petroleum Company Ltd.~~
~~Nearburg Producing Company~~
~~Newfield Exploration Company~~
~~Nexen Petroleum U.S.A., Inc.~~
~~NFR Energy LLC~~
~~Noble Energy, Inc.~~
~~Oasis Petroleum~~
~~Oxy Long Beach, Inc. (Thums Long Beach)~~
~~Panhandle Oil and Gas Inc.~~
~~PDC Energy (Petroleum~~
   ~~Development Corporation)~~
~~Penn Virginia Corporation~~
~~Petroglyph Energy, Inc.~~
~~Petrohawk Energy Corporation~~
~~Petro-Hunt, LLC~~
~~PetroQuest Energy, Inc.~~
~~Phoenix Exploration Company~~
~~Pioneer Natural Resources Company~~
~~Plains Exploration & Production Company~~
~~QEP Resources, Inc. (Questar~~
   ~~Market Resources)~~
~~Quantum Resources Management, LLC~~
~~Quicksilver Resources Inc.~~
~~Range Resources Corporation~~
~~Read & Stevens, Inc.~~
~~Resolute Energy Corporation~~
~~Rex Energy Corporation~~
~~Rosetta Resources, Inc.~~
~~Samson~~
~~Seneca Resources Corporation~~
~~Sheridan Production Company~~
~~Sinclair Services Company~~
~~Southwestern Energy Production Company~~
~~St. Mary Land & Exploration Company~~
~~Stone Energy Corporation~~
~~Summit Petroleum LLC~~
~~Swift Energy Company~~
~~Talisman Energy USA Inc. (Fortuna)~~
~~T-C Oil Company~~
~~Tema Oil and Gas Company~~
~~Total E&P USA, Inc.~~
~~Triad Energy Corporation~~
~~Tri-Valley~~
Rite – Hite Holding Corporation

~~Ultra Petroleum~~TIMET
Nicor
Robert Bosch
TJX Companies
Nielsen
Rollins
Total System Services
NiSource
R.R. Donnelley
Transocean
NJM Insurance Group
RSC Equipment Rental
Travis County
NJVC LLC
Ryland Group
Treasure Island Resort & Casino
Nordson Corporation
~~Vantage~~
Safety-Kleen Systems
Tri-Met
Nordstrom Bank
Sakura Finetek USA
Trinity Consultants
North Texas Tollway Authority
Salk Institute
Trinity Health
Northwestern Memorial Hospital
Salt River Project
TriWest Healthcare Alliance
Northwestern Mutual
Samuel Roberts Noble Foundation
True Value Company
NuStar Energy ~~L.L.C~~
~~Venoco, Inc.~~
~~Vernon E. Faulconer, Inc.~~
~~Wagner~~
San Antonio Water System
Tufts Health Plan
OfficeMax
San Manuel Band of Mission Indians
Turner Broadcasting
Ohio Public Employees Retirement System
Sauer-Danfoss
UDR
Ohio State University
S&C Electric
UMDNJ-University of Medicine & ~~Brown, Ltd.~~
~~Walter Duncan, Inc.~~
~~Whiting Petroleum~~Dentistry
Ohio State University Medical Center
Schaumburg Township District Library
Underwriters Laboratories
OHL
Schneider Electric
United American Insurance
Old Dominion Electric
Schwan Food
UnitedHealth
Oncology Nursing Society
Scooter Store
United States Steel
One America Financial Partners
Sealed Air
United Stationers
1st Source
Sealy
Universal Studios Orlando
Oppenheimer Group
Seco Tools
University Health System
Opus Bank
Securus Technologies
University of Alabama at Birmingham
Orbital Science Corporation
~~Williams~~
~~Woodside~~
SEMCO Energy
~~Wynn-Crosby~~
~~XTO Energy Inc.~~
~~Yuma Exploration & Production~~
   ~~Company, Inc.~~

~~Mercer’s 2010 Total~~
~~Compensation Survey for~~
~~the Energy Sector~~

~~AGL Resources~~
~~AGL Resources~~
University of California, Berkeley
Oshkosh
Sentara Healthcare
University of Chicago
Pall Corporation
Serco
University of Georgia
Pampered Chef
Shands HealthCare
University of Houston
Panduit Corporation
Sharp Electronics
University of Kansas Hospital
Patterson Companies
Simon Property Group
University of Maryland Medical Center
Paychex
Simpson Housing
University of Miami
Pearson
SIRVA
University of Michigan
Penn National Gaming
Smead Manufacturing
University of Nebraska-Lincoln
Penn State Hershey Medical Center
SMSC Gaming Enterprise
University of North Texas
Pharmavite
Sole Technology
University of Notre Dame
PHH Arval
Solo Cup
University of Pennsylvania
Pier 1 Imports
Southco
University of Rochester
PMA Companies
Southeastern Freight Lines
University of South Florida
Polaris Industries
South Jersey Gas
University of St. Thomas
Policy Studies
Southwest Gas
University of Texas at Austin
Polymer Technologies
Space Dynamics Laboratory
University of Texas Health Science Center
Popular
Space Telescope Science Institute
at Houston
Port of Portland
Spectrum Health – ~~Sequent~~
   ~~Energy Management~~
~~Abraxas Petroleum~~Grand Rapids Hospitals
University of Wisconsin Medical Foundation
Poudre Valley Health Systems
Spinmaster
University of Wisconsin Hospital and Clinics
Preformed Line Products
SPX Corporation
~~Aera Energy, LLC~~
~~Aker Solutions~~
~~Alliance Pipeline~~
~~Alyeska Pipeline Service Company~~
~~Ameren~~
University Physicians
Premera Blue Cross
Stampin’ Up!
UPS
Premier
Standard Motor Products
URS
PREMIER Bankcard
Staples
USAA
Principal Financial
State Corporation
~~Ameren Corporation – AmerenEnergy~~
   ~~Fuels & Services~~
~~Ameren Corporation –~~
  ~~Ameren Energy Resources~~
~~Ameren Corporation – AmerienIllinois~~
~~Ameren Corporation – AmerenUE~~
~~American Transmission Company~~
~~Apache Corporation~~
~~Arch Coal, Inc.~~
~~Associated Electric Cooperative, Inc.~~
~~Atlas Energy, Inc.~~
~~BG US Services~~
~~BHP Billiton Petroleum (Americas), Inc.~~
~~Baker Hughes, Inc.~~
~~Baker Hughes, Inc. – Baker Atlas~~
~~Baker Hughes, Inc. – Baker Hughes~~
   ~~Drilling Fluids~~
~~Baker Hughes, Inc. – Baker Hughes Inteq~~
~~Baker Hughes, Inc. – Baker Oil Tools~~
~~Baker Hughes, Inc. – Baker Petrolite~~
~~Baker Hughes, Inc. – Centrilift~~
~~Baker Hughes, Inc. – Gaffney, Cline &~~
   ~~Associates~~
~~Baker Hughes, Inc. – GeoMechanics~~
   ~~International~~
~~Baker Hughes, Inc. – Hughes Christensen~~
~~Baker Hughes, Inc. – Production Quest~~
~~Basic Energy Services~~
~~Baytex Energy USA Ltd.~~
~~Boardwalk Pipeline Partners, LP~~
~~BreitBurn Energy Partners L.P.~~
~~BreitBurn Energy Partners L.P. – Eastern~~
   ~~Division~~
~~BreitBurn Energy Partners L.P. –~~
   ~~Orcutt Facility~~
~~BreitBurn Energy Partners L.P. –~~
   ~~West Pico Facility~~
~~BreitBurn Energy Partners L.P. –~~
   ~~Western Division~~
~~BreitBurn Energy Partners L.P. –~~
   ~~Western Division, California Operations~~
~~BreitBurn Energy Partners L.P. –~~
   ~~Western Division, Florida Operations~~
~~BreitBurn Energy Partners L.P. –~~
   ~~Western Division, Wyoming Operations~~
~~Brigham Exploration Company~~
~~Brookfield Renewable Power~~ Commission
U.S. Foodservice

MDU Resources Group, Inc.Proxy Statement
A-5

Proxy Statement

~~Buckeye~~USG
American Transmission Company
CVR Energy, Inc. – Refining & Marketing, LLC
Utah Transit Authority
Apache Corporation
Davis Petroleum Corp.
UT Southwestern Medical Center
Arch Coal, Inc.
DCP Midstream, LLC
Vail Resorts Management
Associated Electric Cooperative, Inc.
Denbury Resources, Inc.
Valpak/Cox Target Media
Atlas Energy, L.P.
Det Norske Veritas US
Valspar
Baker Hughes, Inc.
Devon Energy
Ventura Foods
Baker Hughes, Inc. – Completion
Diamond Offshore Drilling, Inc.
Venturedyne
and Production
Direct Energy Marketing Ltd. US
Verde Realty
Baker Hughes, Inc. – Drilling and Evaluation
DM PETEROLUEM OPERATIONS
Vermeer Manufacturing Company
Baker Hughes, Inc. – Gulf of Mexico
Dominion Resources, Inc.
Vesuvius USA
Baker Hughes, Inc. – Integrated Operations
Dominion Resources, Inc. –
VF
Baker Hughes, Inc. – Intelligent
Dominion Energy
Via Christi Health
Production Systems
Dominion Resources, Inc. –
Viad
Baker Hughes, Inc. – Reservior
Dominion Generation
Vi-Jon
Development Services
Dominion Resources, Inc. –
Virginia Farm Bureau Insurance Sevice
Baker Hughes, Inc. – US Land
Dominion Virginia Power
Visiting Nurse Service of NY
Basic Energy Services
Edison Mission Energy
Volvo Group North America
Baytex Energy USA Ltd.
El Paso Corporation
Wackenhut Services
BG US Services
El Paso Corporation – Exploration and
Walgreen Co.
BHP Billiton Petroleum (Americas), Inc.
Production
Washington University in St. Louis
Black Hills Energy
El Paso Corporation – Pipeline Group
Wawa
Boardwalk Pipeline Partners, LP
ElectriCities of North Carolina, Inc.
Wayne Memorial Hospital
Boart Longyear
Enbridge Liquids Pipelines
W C Bradley
BreitBurn Energy Partners L.P.
Energen Corporation
Wellcare Health Plans
BreitBurn Energy Partners L.P. –
Energen Corporation – Energen
Wellmark BlueCross BlueShield
Eastern Division
Resources Corporation
Wells’ Dairy
BreitBurn Energy Partners L.P. –
Energy Future Holdings Corporation
Werner
Orcutt Facility
Energy Future Holdings Corporation –
West Bend Mutual Insurance
BreitBurn Energy Partners L.P. – West
Luminant
Western Southern Financial Group
Pico Facility
Energy Future Holdings Corporation –
Western Union Company
BreitBurn Energy Partners L.P. –
TXU Energy
Westfield Group
Western Division
Enerplus Resources Fund – Enerplus
Weston Solutions
BreitBurn Energy Partners L.P. –
Resources (USA) Corporation
West Penn Allegheny Health System
Western Division, California Operations
EnerVest Management Partners, Ltd. –
West Virginia University Hospitals
BreitBurn Energy Partners L.P. –
EV Energy Partners, LP
Wheaton Franciscan Healthcare
Western Division, Florida Operations
EnerVest, Ltd.
Wheels
BreitBurn Energy Partners L.P. –
Eni US Operating Company, Inc.
Whirlpool
Western Division, Wyoming Operations

ENSCO International, Inc.
Whole Foods Market

~~J-W Operating~~BreitBurn Management Company –
~~Burnett Oil Co., Inc.~~

ENSCO International, Inc. –
Wilder Foundation

~~J-W Measurement~~Bridwell Oil Company
~~CCS Midstream Service, LLC~~

Deepwater Business Unit
WilmerHale LLP

~~J-W Operating~~Brigham Exploration Company –
~~CEDA International Inc.~~

ENSCO International, Inc. – North & South
Wilsonart International

~~J-W~~Brookfield Renewable Power ~~Company~~
~~CGGVeritas~~

America Business Unit
Windstream Communications

~~J-W Operating Company –~~Buckeye Partners, L.P.
Ensign United States Drilling, Inc.
~~CHS~~Winn-Dixie Stores
Burnett Oil Co., Inc.
Ensign United States Drilling, Inc. – ~~Energy~~California
Wisconsin Physicians Service Insurance
Calfrac Well Services Corporation
Entegra Power Services, LLC
World Vision International
California ISO
Entergy
World Vision United States
Cameron International
Entergy – Non-Regulated
Worthington Industries
Cameron International – Drilling and
Entergy – Regulated
Wyle Laboratories
Production Systems

EOG Resources, Inc.
Yamaha Corporation of America

~~J-W Wireline & Excell~~Cameron International – Process and
Equal Energy US Inc.
~~CITGO Petroleum~~YKK Corporation of America
Compression Systems
ERIN Engineering and Research, Inc.
YSI
Cameron International – Valves &

EXCO Resources, Inc.
Zale

~~Kinder Morgan, Inc.~~
~~CPS Energy~~Measurement

EXCO Resources, Inc. – EXCO Appalachia
Zebra Technologies Corporation

~~Lario Oil & Gas Company~~
~~Calfrac Well Services Corporation~~Caterpillar, Inc. – Global Petroleum

EXCO Resources, Inc. – EXCO East TX/LA
Zimmer

~~Legacy Reserves, LP~~
~~California ISO~~CEDA International Inc.

EXCO Resources, Inc. – EXCO Midstream

~~Linn~~
CenterPoint Energy ~~LLC~~
~~Cameron International~~

EXCO Resources, Inc. – EXCO

~~M-I SWACO~~
~~Cameron International – Aftermarket~~Central Hudson Gas & Electric Corp.

Permian/Rockies
~~MCX Exploration (USA), Ltd.~~
~~Cameron International – Centrifugal~~Mercer’s 2011 Total Compensation

~~Edison Mission Energy~~
~~MDU Resources Group,~~CHS Inc.
~~Cameron International –~~
~~Edison Mission Energy –~~
~~MDU Resources Group, Inc. –~~
~~Compression Systems~~
~~EME Homer City Generation~~
~~WBI Holdings, Inc.~~
~~Cameron International –~~
~~Edison Mission Energy –~~
~~Magellan Midstream Holdings, LP~~
~~Distributor Valves Division~~
~~Edison Mission O&M~~
~~Magellan Midstream Holdings, LP –~~
~~Cameron International – Drilling Systems~~
~~Edison Mission Energy –~~
~~Pipeline/Terminal Division~~
~~Cameron International –~~
~~Energy Mission Marketing & Trading~~
~~Magellan Midstream Holdings, LP –~~
~~Drilling and Production Systems~~
~~Edison Mission Energy –~~
~~Transportation~~
~~Cameron International –~~
~~Midwest Generation EME~~
~~MarkWest Energy Partners LP~~
~~Engineered Valves Divison~~
~~Edison Mission Energy –~~
~~MarkWest Energy Partners LP –~~
~~Cameron International – Flow Control~~
~~Midwest Generation, LLC~~
~~Gulf Coast Business Unit~~
~~Cameron International –~~
~~El Paso Corporation~~
~~MarkWest Energy Partners LP –~~
~~Measurement Division~~
~~El Paso Corporation –~~
~~Liberty Business Unit~~
~~Cameron International –~~
~~Exploration & Production~~
~~MarkWest Energy Partners LP –~~
~~Petreco Process Systems~~
~~El Paso Corporation –~~
~~Northeast Business Unit~~
~~Cameron International –~~
~~Pipeline Group~~
~~MarkWest Energy Partners LP –~~
~~Process Valves Division~~
~~EnerVest, Ltd.~~
~~Southwest Business Unit~~
~~Cameron International – Reciprocating~~
~~Energen Corporation~~
~~Medco Petroleum Management~~
~~Cameron International – Subsea Systems~~
~~Energen Corporation – Energen Resources~~
~~Mestena Operating, Ltd.~~
~~Cameron International – Surface Systems~~
~~Corporation~~
~~Mirant Corporation~~
~~Cameron International – Valves &~~
~~Energy Future Holdings Corporation~~
~~Mitsui E&P USA LLC~~
~~Measurement~~
~~Energy Future Holdings Corporation –~~
~~Modec International Inc.~~
~~CenterPoint Energy~~
~~Luminant~~
~~Murphy Oil Corporation~~
~~Chesapeake Energy Corporation~~
~~Energy Future Holdings Corporation –~~
~~New York Power Authority~~
~~Chesapeake Energy Corporation – CEMI~~
~~TXU Energy~~
~~New York Power Authority –~~
~~Chesapeake Energy Corporation –~~
~~Enerplus Resources Fund – Enerplus~~
~~Blenheim-Gilboa Power Project~~
~~Chesapeake Midstream Partners~~
~~Resources (USA) Corporation~~
~~New York Power Authority –~~
~~Chesapeake Energy Corporation – Compass~~
~~Eni US Operating Company, Inc.~~
~~Clark Energy Center~~
~~Chesapeake Energy Corporation –~~
~~Entegra Power Services, LLC~~
~~New York Power Authority –~~
~~Diamond Y~~
~~Equal Energy Ltd. – Altex Energy Corporation~~
~~Niagara Power Project~~
~~Chesapeake Energy Corporation –~~

Explorer Pipeline Company
~~New York Power Authority –~~
~~Great Plains~~Survey for the Energy Sector

~~Exterran~~
~~Richard M. Flynn Power Plant~~
~~Chesapeake~~CHS Inc. – Energy, ~~Corporation – Hodges~~Energy Marketing

Fasken Oil and Ranch, Ltd.
~~New York Power Authority –~~
~~Chesapeake Energy Corporation – Midcon~~

~~Forest Oil~~CHS Inc. – Energy, Refineries
Finley Resources Inc.
Abraxas Petroleum Corporation

~~St. Lawrence/FDR Power Project~~
~~Chesapeake Energy Corporation – Nomac~~
~~GE Oil & Gas Operations LLC –~~
~~Newfield Exploration Company~~
Cimarex Energy Co.

~~PII North America, Inc.~~First Solar
Advanced Drilling Technologies, LLC

~~Nexen Petroleum USA, Inc.~~
Cinco Natural Resources Corporation

~~Genesis Energy, LLC~~Forest Oil Corporation
Afren Resources USA, Inc.

~~NiSource Inc.~~
Citation Oil & Gas Corp.

~~Global Industries~~General Electric Energy
AGL Resources

~~NiSource Inc. – Bay State Gas Company~~CITGO Petroleum Corporation
Genesis Energy, LLC
~~Cleco Corporation~~AGL Resources – Sequent Energy
Colonial Pipeline Company
Global Industries
Management
Consolidated Edison

Great River Energy
Aker Solutions

~~NiSource Inc. – Columbia Gas of Kentucky~~
~~Colonial Pipeline Company~~Copano Energy

Halliburton Company
Alliance Pipeline, Inc.

~~NiSource Inc.~~Copano Energy – ~~Columbia Gas of Ohio~~Scissortail Energy, LLC
Helix Energy Solutions Group
~~Constellation~~Alliant Energy ~~Partners LLC~~
Core Laboratories

Helmerich & Payne, Inc.
Alyeska Pipeline Service Company

~~NiSource Inc. – Columbia Gas of~~
~~Copano~~CPS Energy

Hercules Offshore, Inc.
Ameren Corporation

~~Pennsylvania~~
Crosstex Energy Services

Hess Corporation
Ameren Corporation – ~~Exploration & Production~~Ameren Illinois

~~NiSource~~CVR Energy, Inc. ~~– Columbia Gas of Virginia~~
~~DCP Midstream, LLC~~

HighMount Exploration & Production LLC
Ameren Corporation – Ameren Missouri

~~NiSource~~CVR Energy, Inc. – ~~NiSource Energy~~
~~DPL Inc.~~Coffeyville Terminal, LLC

Hilcorp Energy Company
Ameren Corporation –

~~Technologies~~
~~DTE~~CVR Energy, Inc. – Crude Transportation, LLC

Hilcorp Energy Company – Harvest
AmerenEnergyResources

~~NiSource~~CVR Energy, Inc. – ~~NiSource Gas~~
~~Davis Petroleum Corp.~~
~~Harvest Pipeline Company~~
~~Transmission & Storage~~
~~Det Norske Veritas USA~~
~~Holly Corporation~~
~~NiSource Inc. – Northern Indiana~~
~~Devon Energy~~
~~Holly Corporation – Asphalt Company~~
~~Fuel & Light~~
~~Dominion Resources, Inc.~~
~~Holly Corporation – Logistic Services~~
~~NiSource Inc. – Northern Indiana Public~~
~~Dominion Resources, Inc. –~~
~~Holly Corporation – Navajo Refining~~
~~Service Company~~
~~Dominion Energy~~
~~Company~~
~~NiSource Inc. – Transmission Corporation~~
~~Dominion Resources, Inc. –~~
~~Holly Corporation – Refining and Marketing~~
~~Nippon Oil Exploration USA Ltd.~~
~~Dominion Generation~~
~~Woods Cross~~
~~Noble Corporation~~
~~Dominion Resources, Inc. –~~
~~Holly Refining and Marketing Tulsa~~Nitrogen Fertilizers, LLC

~~Noble Corporation – Noble Drilling~~
~~Dominion Virginia Power~~
~~Hunt Consolidated – Hunt Oil Company~~
~~Services, Inc.~~
~~Dresser-Rand Group Inc.~~
~~Husky Energy Inc.~~
~~Noble Energy, Inc.~~
~~Dresser-Rand Group Inc. –~~
~~ION Geophysical Corporation~~
~~OGE Energy Corporation~~
~~Dresser-Rand New Equipment~~
~~J-W Operating Company~~
~~ONEOK, Inc.~~
~~Dresser-Rand Group, Inc. –~~
~~J-W Operating Company –~~
~~ONEOK, Inc. – Kansas Gas Service Division~~
~~Dresser-Rand Product Services~~
~~Cohort Energy Company~~
~~ONEOK, Inc. – ONEOK Energy~~
~~Dresser-Rand Group, Inc. –NAO~~
~~J-W Operating Company –~~
~~Services~~Pipeline Company
~~DynMcDermott Petroleum~~
~~J-W Gathering Company~~
~~ONEOK, Inc. – ONEOK Partners~~
~~Operations Company~~

A-6
MDU Resources Group, Inc.Proxy Statement

Proxy Statement

Holly Corporation
NiSource Inc. – NiSource Gas Transmission
Seneca Resources Corporation – East
Holly Corporation – Asphalt Company
& Storage
Seneca Resources Corporation – West
Holly Corporation – Holly Refining
NiSource Inc. – Northern Indiana Fuel
SK E&P Company
and Marketing Tulsa LLC
& Light
Southern Company
Holly Corporation – Logistic Services
NiSource Inc. – Northern Indiana
Southern Company – Gulf Power Company
Holly Corporation – Navajo Refining
Public Service Company
Southern Company – SouthernLINC
Company
NiSource Inc. – Transmission Corporation
Southern Union Company
Holly Corporation – Refining and
Noble Corporation
Southern Union Company – Missouri
Marketing Woods Cross
Noble Corporation – Noble Drilling
Gas Energy
Hunt Consolidated Inc. – Hunt Oil Company
Services, Inc.
Southern Union Company – New
Husky Energy Inc.
Noble Energy, Inc.
England Gas
Information Handling Services (IHS)
Northwest Natural Gas
Southern Union Company –
ION Geophysical Corporation
NSTAR Electric & Gas
Panhandle Energy
Jacksonville Electric Authority
Oceaneering International, Inc.
Southern Union Company – Southern
J-W Operating Company
Oceaneering International, Inc. – Americas
Union Gas Services
J-W Operating Company – J-W
Oceaneering International, Inc. – Inspection
Southwestern Energy Company
Gathering Company
Oceaneering International, Inc. –
Spectra Energy Corp.
J-W Operating Company – J-W
Oceaneering Intervention Engineering
Sprague Energy Corp.
Manufacturing Company
Oceaneering International, Inc. – Umbilicals
Stantec Inc.
J-W Operating Company – J-W
OGE Energy Corporation
Statoil
Measurement Company
ONEOK, Inc.
Superior Energy Services, Inc.
J-W Operating Company – J-W
ONEOK, Inc. – Kansas Gas Services Division
Superior Energy Services, Inc. –
Power Company
ONEOK, Inc. – Oklahoma Natural

~~Superior Energy~~Completion Services ~~Inc. LLC~~
J-W Operating Company – J-W Wireline

~~Albemarle Corporation~~
Gas Division

Superior ~~Natural Gas Corporation~~Energy Services, Inc. –
& Excell

~~Alcoa,~~ONEOK, Inc. – ONEOK Energy
Well Solutions
Kinder Morgan, Inc.
Services Company
Superior Energy Services, Inc.- HB Rentals
Legacy Reserves LP
ONEOK, Inc. – ONEOK Partners
Superior Pipeline Company
LG&E and KU Energy LLC
ONEOK, Inc. – Texas Gas Services Division

~~TAQA New World~~Talisman Energy Inc. US
LINN Energy, LLC

~~Alfa Laval, Inc.~~
~~Occidental Petroleum Corporation –~~PacifiCorp

~~TAQA North USA~~Tellus Operating Group, LLC
Magellan Midstream Holdings, LP

~~Allegheny County Sanitary Authority~~Parallel Petroleum LLC
Tesco Corporation
~~Thums Long Beach~~Magellan Midstream Holdings, LP
Parker Drilling Company

TGS-NOPEC Geophysical Company
~~Allegheny Energy, Inc.~~
~~Oceaneering International, Inc.~~Pipeline/Terminal Division

~~Talisman Energy Inc. US~~
~~Allegheny Technologies, Inc.~~
~~Oceaneering International, Inc. – Americas~~
~~Tecpetrol Corporation~~
~~Allegiance Health~~
~~Oceaneering International, Inc. – Inspection~~
~~Tellus Operating Group, LLC~~
~~Allergan, Inc.~~
~~Oceaneering International, Inc. – Multiflex~~
~~Tesco Corporation~~
~~Allete, Inc.~~
~~Oceaneering International, Inc. – OIE~~Pason Systems USA Corp.

The Williams Companies, Inc.
~~Alliance Data Systems Corporation~~
PDMagellan Midstream Holdings, ~~Company~~LP –

~~ThermaSource,~~Pason Systems USA Corp. – Auxsol Inc.

~~Alliance Defense Fund~~THUMS Long Beach Company
~~PJM Interconnection~~Transportation

~~ThermaSource, Inc.~~Pason Systems USA Corp. – Pason Offshore

~~Alliance Residential LLC~~TOTAL E&P USA, Inc.
~~PSNC~~MarkWest Energy Partners LP

~~ThermsSource Cementing~~
~~Alliant~~PDC Energy ~~Corporation~~
~~Parallel Petroleum LLC~~

TransCanada Corporation
MarkWest Energy Partners LP – Gulf Coast

~~Allstate~~Petrohawk Energy Corporation
~~Parker Drilling Company~~

TransCanada Corporation – Energy Group
Business Unit

~~Ally Financial, Inc.~~
~~Pason Systems USA Corp.~~
~~US Pipeline Central~~
~~Alpha~~Piedmont Natural ~~Resources, Inc.~~
~~Pepco Holdings,~~Gas Company, Inc.

Transocean, Inc.
MarkWest Energy Partners LP –

~~ALSAC St. Jude~~
~~Petroleum Development Corporation~~Pioneer Natural Resources

Unit Corporation
Liberty Business Unit

~~Amazon.com, Inc.~~
~~Pioneer Drilling Company~~PJM Interconnection

Unit ~~Corporation~~Drilling Company
MarkWest Energy Partners LP – Northeast
Plains All American Pipeline, L.P.
Unit Petroleum Company
Business Unit
Plains All American Pipeline, L.P. –

~~Ambac Financial Group~~United Water
~~Pioneer Natural Resources USA, Inc.~~MarkWest Energy Partners LP – Southwest

~~Superior Pipeline Company, LLC~~PAA Natural Gas Storage, L.P.

~~Ambius~~Venoco, Inc.
Business Unit
Plains Exploration & Production Company

~~Unit Corporation – Unit Drilling Company~~Verado Energy, Inc.
MCX Exploration (USA), Ltd.

~~Ameren~~Precision Drilling Corporation
~~Pride International~~

~~Unit Corporation~~Weatherford – ~~Unit Petroleum Company~~
~~American Cancer Society, Inc.~~US Region
~~Puget Sound Energy~~
~~Venoco,~~MDU Resources Group, Inc.

~~American Commercial Lines, Inc.~~
~~Questar Corporation~~
~~Verado~~Puget Sound Energy ~~Inc.~~
~~American Dehydrated Foods, Inc.~~
~~Questar Corporation – QEP Resources~~

WGL Holdings, Inc. – Washington Gas
MDU Resources Group, Inc. – WBI

~~American Eagle Outfitters,~~QEP Resources, Inc
Whiting Petroleum Corporation
Holdings, Inc.
Quicksilver Resources Inc.

~~XTO~~Xcel Energy Inc.
Mestena Operating, L.L.C.

~~American Electric Power Company~~
R. Lacy, ~~Inc. – R. Lacy Services, Ltd.~~
~~Xcel Energy Inc.~~
~~American Express Company~~
~~RAM Energy Resources,~~ Inc.

Mitsui E&P USA LLC

~~American Family Insurance~~Range Resources Corp.
Murphy Oil Corporation
Regency Energy Partners LP
New York Power Authority
Regency Energy Partners LP – Contract
New York Power Authority – Blenheim-Gilboa
Compression Segment
Power Project
Repsol Services Company
New York Power Authority – Clark
RKI Exploration & Production, LLC

~~Towers Watson 2010/2011~~
Energy Center

~~American Greetings Corporation~~
~~Range Resources Corp.~~
~~Top Management~~
~~American International Group, Inc.~~
~~Regency Energy Partners LP~~
~~Compensation Survey~~
~~American National Insurance~~
~~Repsol Services Company~~
~~American Tire Distributors Holdings,~~
~~Resolute Natural Resources Company, LLC~~
~~American Tower Corporation~~
Rosewood Resources, Inc.

~~3M Company~~
New York Power Authority – Niagara

~~American University~~
~~Rosewood Resources, Inc. – Advanced~~
~~84 Lumber Company~~
~~American Water~~
~~Drilling Technologies~~
~~A. O. Smith Corporation~~
~~AMERIGROUP Corporation~~
Rowan Companies, Inc.

~~AAA~~
Power Project

~~AmeriPride Services,~~Safety-Kleen Systems, Inc.
New York Power Authority – Richard
SCANA Corporation

~~AAR Corporation~~
M. Flynn Power Plant

~~Ameriprise Financial, Inc.~~
SCANA Corporation – Carolina Gas

~~Aaron’s, Inc.~~
New York Power Authority – St.

~~AmerisourceBergen Corporation~~
Transmission Corporation

~~Abbott Laboratories~~
Lawrence/FDR Power Project

~~Ameristar Casinos~~SCANA Corporation – PSNC Energy
Newfield Exploration
SCANA Corporation – SC Electric & Gas

~~Abercrombie & Fitch~~
~~Ames True Temper~~
~~SandRidge Energy,~~Nexen Petroleum USA, Inc.

~~ABM Industries,~~SCANA Corporation – SEMI (SCANA Energy
Nippon Oil Exploration USA Ltd.
Marketing, Inc.)
NiSource Inc.

~~AMETEK, Inc.~~
Schlumberger Limited –

~~Accident Fund Insurance Company~~
NiSource Inc. – Columbia Gas of Kentucky
Schlumberger Oilfield Services
NiSource Inc. – Columbia Gas of

~~AMETEK, Inc./Advanced Measurement~~
Science Applications International

~~America~~
Massachusetts

~~Technologies~~
Corporation (SAIC)

~~Accor North America~~
NiSource Inc. – Columbia Gas of Ohio

~~Amgen, Inc.~~
~~Seawell~~Seadrill Americas Inc.

~~Acme Industries~~
NiSource Inc. – Columbia Gas of

~~Amica Mutual Insurance Company~~
SemGroup Corporation

~~The Actors Fund of America~~
Pennsylvania

~~Amkor Technology, Inc.~~
SemGroup Corporation – SemCrude

~~Acuity~~
NiSource Inc. – Columbia Gas of Virginia

~~Amphenol Corporation~~
SemGroup Corporation – SemGas

~~Acuity Brands,~~
NiSource Inc. – Kokomo Gas And

~~AMR Corporation~~
SemGroup Corporation – SemStream

~~ACUMED LLC~~
Fuel Company

~~Anadarko Petroleum Corporation~~
Seneca Resources Corporation

~~Administaff, Inc.~~
~~Analog Devices~~
~~Seneca Resources Corporation – Bakersfield~~
~~Adobe Systems, Inc.~~
~~Anchor Bank NA~~
~~Seneca Resources Corporation – Williamsville~~
~~ADTRAN Incorporated~~
~~Andersen Corporation~~
~~Smith International~~
~~Advance Auto Parts, Inc.~~
~~Andersons, Inc.~~
~~SourceGas LLC~~
~~Advanced Micro Devices~~
~~Anixter International, Inc.~~
~~Southern Company~~
~~AECOM Technology Corporation~~
~~Annaly Capital Management~~
~~Southern Company –~~
~~Aegon USA~~
~~AnnTaylor Stores Corporation~~
~~Alabama Power Company~~
~~Aeronix, Inc.~~
~~AOC LLC~~
~~Southern Company – Georgia Power~~
~~Aeropostale, Inc.~~
~~Aon Corporation~~
~~Southern Company – Gulf Power Company~~
~~AES Corporation~~
~~Apache Corporation~~
~~Southern Company –~~
~~Aetna, Inc.~~
~~Apollo Group~~
~~Mississippi Power Company~~
~~Affinia Group Intermediate Holdings, Inc.~~
~~Apple, Inc.~~
~~Southern Union Company~~
~~AFLAC Incorporated~~
~~Applied Materials, Inc.~~
~~Southern Union Company –~~
~~AFP, Inc.~~
~~AptarGroup, Inc.~~
~~Missouri Gas Energy~~
~~AGCO Corporation~~
~~ARAMARK Corporation~~
~~Southern Union Company –~~
~~Agilent Technologies, Inc.~~
~~Arch Coal, Inc.~~
~~New England Gas~~
~~Agilysys, Inc.~~
~~Archstone~~
~~Southern Union Company –~~
~~AGL Resources, Inc.~~
~~Armed Forces Insurance~~
~~Panhandle Energy~~
~~AgriBank, FCB~~
~~Armstrong World Industries~~
~~Southern Union Company –~~
~~Air Products & Chemicals, Inc.~~
~~Arrow Electronics, Inc.~~
~~Southern Union Gas Services~~
~~AirTran Holdings, Inc.~~
~~ArvinMeritor, Inc.~~
~~Southwestern Energy Company~~
~~Aker Solutions~~
~~Asahi Kasei Plastics NA, Inc.~~
~~Sprague Energy Corp.~~
~~AKSteel Holding Corporation~~
~~Asbury Automotive Group, Inc.~~
~~Stantec Inc.~~
~~Alaska Air Group, Inc.~~
~~Ascent Media Group~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
~~A-7~~

~~Proxy Statement~~

~~ASCO – Valve~~
~~Boeing Company~~
~~ConnectiCare Capital LLC~~
~~Ash Grove Cement Company~~
~~Boise Cascade Holdings LLC~~
~~Conocophillips~~
~~Ashland, Inc.~~
~~Boise, Inc.~~
~~Consol Energy, Inc.~~
~~Asset Marketing Service, Inc.~~
~~Bon-Ton Stores, Inc.~~
~~Consolidated Edison, Inc.~~
~~Assurant, Inc.~~
~~Borders Group, Inc.~~
~~Constellation Energy~~
~~Asurion Corporation~~
~~Borg Warner~~
~~Continental Airlines, Inc.~~
~~AT&T, Inc.~~
~~Bosch Packaging Services~~
~~Continental Data Graphics~~
~~Atlas Energy, Inc.~~
~~Bosch Rexroth Corporation~~
~~Convergys Corporation~~
~~Atmos Energy Corporation~~
~~Boston Scientific Corporation~~
~~Con-Way~~
~~Aurora Healthcare~~
~~Boy Scouts of America~~
~~Cook Communications Ministries~~
~~The Auto Club Group~~
~~Boyd Gaming Corporate~~
~~Cooper Tire & Rubber Company~~
~~Autodesk, Inc.~~
~~Bradley Corporation~~
~~Cooper-Standard Holdings, Inc.~~
~~Autoliv, Inc.~~
~~Brady Corporation~~
~~CooperVision, Inc.~~
~~Automobile Club of Southern California~~
~~Bridgepoint Education~~
~~Core Mark Holding Company, Inc.~~
~~AutoNation, Inc.~~
~~Briggs & Stratton Corporation~~
~~Corinthian Colleges~~
~~AutoZone, Inc.~~
~~Brightpoint, Inc.~~
~~Corn Products International, Inc.~~
~~Avery Dennison Corporation~~
~~Brinks Company~~
~~Cornell University~~
~~Avis Budget Group~~
~~Bristol-Myers Squibb Company~~
~~Corning, Inc.~~
~~Avista Corporation~~
~~Broadcom Corporation~~
~~Correctional Medical Services~~
~~Avon Products, Inc.~~
~~Broadlane, Inc.~~
~~Corrections Corporation of America~~
~~Axsys~~
~~Broadridge Financial Solutions~~
~~Costco Wholesale Corporation~~
~~B Braun Medical, Inc.~~
~~Brocade Communications Systems~~
~~Country Insurance & Financial~~
~~B/E Aerospace, Inc.~~
~~Brookdale Senior Living~~
~~Country of Spotsylvania~~
~~Babson College~~
~~Brown Shoe Company, Inc.~~
~~Covance, Inc.~~
~~Baker Hughes, Inc.~~
~~Brownells, Inc.~~
~~Covanta Holding Corporation~~
~~Baldor Electric Company~~
~~Brown-Forman Corporation~~
~~Coventry Health Care, Inc.~~
~~Ball Corporation~~
~~Brunswick Corporation~~
~~CPS Energy~~
~~Bank of America Corporation~~
~~Bryant University~~
~~Cracker Barrel Old Country Store, Inc.~~
~~Bank of New York Mellon Corporation~~
~~BSSI~~
~~Crane Company~~
~~Baptist Health~~
~~Bucyrus International, Inc.~~
~~Crosstex Energy, Inc.~~
~~Barilla America, Inc.~~
~~Buffets, Inc.~~
~~Crown Castle International Corporation~~
~~Barloworld Handling~~
~~Burger King Holdings, Inc.~~
~~CSX Corporation~~
~~Basler Electric Company~~
~~C H Robinson Worldwide, Inc.~~
~~CTS Corporation~~
~~Baxter International, Inc.~~
~~C.R. Bard, Inc.~~
~~Cultural Institute Retirement System~~
~~Baylor College of Medicine~~
~~Cabelas, Inc.~~
~~Cummins, Inc.~~
~~Baylor Health Care System~~
~~Cablevision Systems Corporation~~
~~CUNA Mutual Group~~
~~BB&T Corporation~~
~~Cabot Corporation~~
~~Curtiss Wright Corporation~~
~~Beacon Roofing Supply, Inc.~~
~~Caci International, Inc.~~
~~CVREnergy, Inc.~~
~~Bechtel Systems & Infrastructure, Inc.~~
~~Caelum Research Corporation~~
~~CVS Caremark~~
~~Beckman Coulter, Inc.~~
~~California Casualty Management Company~~
~~Cytec Industries, Inc.~~
~~Becton Dickinson & Company~~
~~California Dental Association~~
~~D R Horton, Inc.~~
~~Belk, Inc.~~
~~Calpine Corporation~~
~~Daimler Financial Services~~
~~Bemis Company, Inc.~~
~~Calumet Specialty Products Partners LP~~
~~Dallas County~~
~~Bemis Manufacturing Company~~
~~Cameron International Corporation~~
~~Dal-Tile, Inc.~~
~~Benchmark Electronics, Inc.~~
~~Campbell Soup Company~~
~~Dana Holding Corporation~~
~~The Bergquist Company~~
~~Career Education Corporation~~
~~Danaher Corporation~~
~~Berkshire Hathaway~~
~~Carhartt, Inc.~~
~~Data Center, Inc.~~
~~Berry Plastics Corporation~~
~~CaridianBCT, Inc.~~
~~DaVita, Inc.~~
~~Berwick Offray LLC~~
~~Carlisle Cos, Inc.~~
~~Dean Foods Company~~
~~Best Buy Company, Inc.~~
~~Carlson Companies, Inc.~~
~~The Decurion Corporation~~
~~Big Lots, Inc.~~
~~CarMax~~
~~Deere & Company~~
~~Bimbo Bakeries USA~~
~~Carpenter Technology Corporation~~
~~Dekalb Regional Healthcare Systems~~
~~Biodynamic Research Corporation~~
~~Carter~~
~~Delta Air Lines, Inc.~~
~~Biogen Idec, Inc.~~
~~Carter’s, Inc.~~
~~Delta Dental Plan of Michigan~~
~~Biomet~~
~~Catalyst Health Solutions~~
~~Deluxe Corporation~~
~~Bio-Rad Laboratories, Inc.~~
~~Caterpillar, Inc.~~
~~Denny’s, Inc.~~
~~BJ Services Company~~
~~CB Richard Ellis~~
~~Denso International America~~
~~BJ’s Wholesale Club, Inc.~~
~~CBS Corporation~~
~~DENTSPLY International, Inc.~~
~~Black Hills Corporation~~
~~CC Media Holdings, Inc.~~
~~DePaul University~~
~~Blackrock, Inc.~~
~~CDM~~
~~Devon Energy Corporation~~
~~Blackstone Group LP~~
~~CEC Entertainment, Inc.~~
~~Dex One Corporation~~
~~Blockbuster, Inc.~~
~~CEI~~
~~DFW International Airport~~
~~Blue Cross Northeastern Pennsylvania~~
~~Celanese Corporation~~
~~Dick’s Sporting Goods, Inc.~~
~~Blue Cross of Idaho Health Service, Inc.~~
~~Celgard, Inc.~~
~~Dickstein Shapiro LLP~~
~~BlueCross BlueShield of Arizona~~
~~Celgene Corporation~~
~~Diebold, Inc.~~
~~BlueCross BlueShield of Delaware~~
~~CEMEX, Inc.~~
~~Dillards, Inc.~~
~~BlueCross BlueShield of Louisiana~~
~~Centene Corporation~~
~~DIRECTV~~
~~BlueCross BlueShield of Nebraska~~
~~Comcast Corporation~~
~~Discover Financial Services, Inc.~~
~~BlueCross BlueShield of South Carolina~~
~~Comerica, Inc.~~
~~Discovery Communications, Inc.~~
~~BlueCross BlueShield of Tennessee~~
~~Commercial Metals~~
~~DISH Network~~
~~Bluelinx Holdings, Inc.~~
~~CommScope, Inc.~~
~~Diversey, Inc.~~
~~BMW Manufacturing Corporation~~
~~Community Coffee Company LLC~~
~~Doherty Employer Services~~
~~Board of Governors of the~~
~~Community Health Systems, Inc.~~
~~Dole Food Company, Inc.~~
~~Federal Reserve System~~
~~The Community Preservation Corporation~~
~~Dollar General Corporation~~
~~The Body Shop~~
~~Computer Task Group~~
~~Dollar Thrifty Automotive Group~~
~~A-8~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

~~Dominion Resources, Inc.~~
~~Federal Reserve Bank of Chicago~~
~~Gilbarco, Inc.~~
~~Donaldson Company, Inc.~~
~~Federal Reserve Bank of Cleveland~~
~~Gilead Sciences, Inc.~~
~~Dover Corporation~~
~~Federal Reserve Bank of Dallas~~
~~Glatfelter Company~~
~~Dow Chemical~~
~~Federal Reserve Bank of Kansas City~~
~~The Gleason Works~~
~~DPL, Inc.~~
~~Federal Reserve Bank of Minneapolis~~
~~Global Partners LP~~
~~Dr. Pepper Snapple Group, Inc.~~
~~Federal Reserve Bank of Philadelphia~~
~~GOJO Industries, Inc.~~
~~Dresser-Rand Group, Inc.~~
~~Federal Reserve Bank of San Francisco~~
~~Gold Eagle Company~~
~~DST Systems, Inc.~~
~~Federal Reserve Bank of St. Louis~~
~~Goldman Sachs Group, Inc.~~
~~DTE Energy~~
~~FedEx Express~~
~~Goodman Manufacturing~~
~~Duane Reade Holdings, Inc.~~
~~FedEx Ground~~
~~Goodrich Corporation~~
~~Duke Energy Corporation~~
~~FedEx Office~~
~~Goodyear Tire & Rubber Company~~
~~Duke Realty Corporation~~
~~Fender Musical Instruments~~
~~Google, Inc.~~
~~Duke University & Health System~~
~~Ferguson Enterprises~~
~~Graco, Inc.~~
~~Dun & Bradstreet Corporation~~
~~Fermi National Accelerator Laboratory~~
~~Graham Packaging Company, Inc.~~
~~DuPont~~
~~FerrellGas, Inc.~~
~~Grande Cheese Company~~
~~Dupont Fabros Technology~~
~~Ferro Corporation~~
~~Grange Mutual Insurance Company~~
~~Dyn McDermott~~
~~Fiberweb~~
~~Granite Construction, Inc.~~
~~Dynegy, Inc.~~
~~Fidelity National Financial~~
~~Graphic Packaging Holding Company~~
~~E TRADE Financial Corporation~~
~~Fidelity National Information Services~~
~~Graybar Electric Company, Inc.~~
~~Early Warning Services~~
~~Fifth Third Bancorp~~
~~Great American Insurance/Great~~
~~Eastman Chemical Company~~
~~The First American Corporation~~
~~American Financial~~
~~Eastman Kodak Company~~
~~First Bank~~
~~Great Plains Energy, Inc.~~
~~Eaton Corporation~~
~~First Citizens Bank~~
~~Greenheck Fan Corporation~~
~~eBay, Inc.~~
~~First Horizon National Corporation~~
~~Greif, Inc.~~
~~Echostar Corporation~~
~~First Solar, Inc.~~
~~Greyhound Lines, Inc.~~
~~Ecolab, Inc.~~
~~FirstEnergy Corporation~~
~~Grinnell Mutual Reinsurance Company~~
~~Edison Mission Energy~~
~~Fiserv, Inc.~~
~~Group 1 Automotive, Inc.~~
~~Edward Jones & Company~~
~~Fleetwood Group~~
~~Grow Financial Federal Credit Union~~
~~Edwards Lifesciences~~
~~Flexcon Company, Inc.~~
~~Growmark, Inc.~~
~~Einstein Noah Restaurant Group~~
~~Flexible Steel Lacing Company~~
~~GTECH Corporation~~
~~El Paso Corporation~~
~~Florida Power & Light Company~~
~~GuideStone Financial Resources~~
~~Electrolux Homecare of North America~~
~~Flowers Foods, Inc.~~
~~Habitat for Humanity International~~
~~Eli Lilly & Company~~
~~Flowserve Corporation~~
~~Halliburton Company~~
~~Elizabeth Arden, Inc.~~
~~Fluor Corporation~~
~~Hancock Holdings Company~~
~~EMC Corporation~~
~~FMC Corporation~~
~~Hanesbrands, Inc.~~
~~EMCOR Group, Inc.~~
~~FMC Technologies, Inc.~~
~~Hannaford Bros. Company~~
~~Emerson Climate Technologies, Inc.~~
~~Follett Corporation~~
~~Hanover Insurance Group, Inc.~~
~~Emerson Electric~~
~~Foot Locker, Inc.~~
~~Hapag-Lloyd (America), Inc.~~
~~Enbridge Energy Partners LP~~
~~Ford Motor Company~~
~~Harley Davidson Motor Company~~
~~Energizer Holdings, Inc.~~
~~Fortune Brands~~
~~Harman International Industries~~
~~Energy Enterprise Solutions LLC~~
~~Fossil, Inc.~~
~~Harrahs Entertainment, Inc.~~
~~Energy Future Holdings~~
~~Foster Poultry Farms~~
~~Harris County Hospital District~~
~~Energy Transfer Equity LP~~
~~Foundation for California~~
~~Harsco Corporation~~
~~EnergySolutions, Inc.~~
~~Community Colleges~~
~~Hartford Financial Services~~
~~Enpro Industries (Fairbanks Morse Engine)~~
~~Franklin Resources, Inc.~~
~~Harvard Vanguard Medical Associates~~
~~Entergy Corporation~~
~~Franklin W. Olin College of Engineering~~
~~Harvey Industries~~
~~Enterprise GP Holdings LP~~
~~Freeman Dallas Corporate Office~~
~~Hasbro, Inc.~~
~~EOG Resources, Inc.~~
~~Freeport-McMoRan Copper & Gold, Inc.~~
~~Hastings Mutual Insurance Company~~
~~EON US LLC~~
~~Fremont Group~~
~~Hawaiian Electric Industries, Inc.~~
~~Equifax, Inc.~~
~~Friendly Ice Cream Corporation~~
~~Haynes & Boone LLP~~
~~Equity Residential~~
~~Froedtert & Community Health~~
~~Hayward Industries, Inc.~~
~~Erickson Retirement Communities~~
~~Frontier Communications Corporation~~
~~Hazelden Foundation~~
~~Erie Insurance Group~~
~~Frontier Oil Corporation~~
~~HCA, Inc.~~
~~ESCO Corporation~~
~~Funeral Directors Life Insurance Company~~
~~HCC Insurance Holdings, Inc.~~
~~ESCO Technologies~~
~~G&K Services~~
~~HD Supply, Inc.~~
~~Esterline Technologies Corporation~~
~~Gallagher Arthur J & Company~~
~~HDR, Inc.~~
~~Etnyre International, Ltd.~~
~~Gannett Company~~
~~Health Care Service Corporation~~
~~Evraz, Inc.~~
~~Gap, Inc.~~
~~Health Management Association~~
~~Exel, Inc.~~
~~Gardner Denver, Inc.~~
~~Health Net~~
~~Exelon Corporation~~
~~Gas Technology Institute~~
~~Health Partners~~
~~Exempla Health Care, Inc.~~
~~Gaylord Entertainment~~
~~Health Plus of Michigan~~
~~Exide Technologies~~
~~General Cable Corporation~~
~~HealthNow New York~~
~~Expedia, Inc.~~
~~General Dynamics Corporation~~
~~HealthSouth Corporation~~
~~Express Scripts, Inc.~~
~~General Dynamics Information Technology~~
~~HealthSpring, Inc.~~
~~Exterran Holdings, Inc.~~
~~General Electric Company~~
~~Heartland Food Corporation~~
~~Extra Space Storage~~
~~General Nutrition, Inc.~~
~~Heartland Payment Systems, Inc.~~
~~Exxon Mobil Corporation~~
~~Genesis Energy~~
~~Heat Transfer Research, Inc.~~
~~FAIR Plan Insurance Placement~~
~~Gentiva Health Services~~
~~Helmerich & Payne, Inc.~~
~~Facility of Pennsylvania~~
~~Genuine Parts Company~~
~~Hendrick Medical Center~~
~~Fairfield Manufacturing~~
~~Genworth Financial, Inc.~~
~~Hendrickson International~~
~~Family Dollar Stores~~
~~Genzyme Corporation~~
~~Henry Ford Health System~~
~~Fannie Mae~~
~~Georg Fischer Signet LLC~~
~~Hercules Offshore~~
~~Farmland Foods, Inc.~~
~~Georgia Gulf Corporation~~
~~Herman Miller, Inc.~~
~~Fastenal Company~~
~~Georgia Institute of Technology~~
~~Hershey Company~~
~~Federal Reserve Bank of Boston~~
~~Gerdau Ameristeel~~
~~Hertz Global Holdings, Inc.~~

MDU Resources Group, Inc.Proxy Statement
~~A-9~~A-7

~~Proxy Statement~~

~~Hess Corporation~~
~~ITT Corporation~~
~~Legal & General America~~
~~Hewitt Associates, Inc.~~
~~ITT Industries – AES~~
~~Leggett & Platt, Inc.~~
~~Hewlett-Packard Company~~
~~J J Keller & Associates, Inc.~~
~~Lender Processing Services~~
~~Hexion Specialty Chemicals, Inc.~~
~~J R Simplot Company~~
~~Lennar Corporation~~
~~High Industries, Inc.~~
~~J&J Worldwide Services~~
~~Lennox International, Inc.~~
~~Highmark, Inc.~~
~~J.C. Penney Company~~
~~Level 3 Communications, Inc.~~
~~Hill Phoenix~~
~~Jabil Circuit, Inc.~~
~~Levi Strauss & Company~~
~~Hilti, Inc.~~
~~Jack In The Box, Inc.~~
~~Lexmark International, Inc.~~
~~Hitachi America, Ltd.~~
~~Jacobs Engineering Group, Inc.~~
~~Liberty Global, Inc.~~
~~HNI Corporation~~
~~Jacobs Technology, Inc.~~
~~Liberty Media Corporation~~
~~HNTB Corporation~~
~~James Hardie Building Products~~
~~Lieberman Research Worldwide~~
~~Holden Industries, Inc.~~
~~Jarden Corporation~~
~~Life Technologies Corporation~~
~~Holly Corporation~~
~~JB Hunt Transport Services, Inc.~~
~~Lifepoint Hospitals, Inc.~~
~~Hologic, Inc.~~
~~Jet Blue Airways~~
~~Limited Brands~~
~~Home Depot, Inc.~~
~~JM Family Enterprises~~
~~Lincare Holdings, Inc.~~
~~Home Shopping Network~~
~~Jo-Ann Stores, Inc.~~
~~Lincoln Electric Holdings, Inc.~~
~~Honeywell International, Inc.~~
~~John Crane, Inc.~~
~~Lincoln National Corporation~~
~~Horizon Blue Cross Blue Shield~~
~~John Wiley & Sons, Inc.~~
~~Lithia Motors, Inc.~~
~~Hormel Foods Corporation~~
~~Johns Hopkins University~~
~~Littelfuse, Inc.~~
~~Hospira, Inc.~~
~~Johnson & Johnson~~
~~Little Lady Foods~~
~~Host Hotels & Resorts, Inc.~~
~~Johnson Controls, Inc.~~
~~Live Nation Entertainment, Inc.~~
~~Hostess Brands~~
~~Johnson Financial Group~~
~~Liz Claiborne~~
~~Hot Topic, Inc.~~
~~Jones Apparel Group, Inc.~~
~~LKQ Corporation~~
~~Hubbell, Inc.~~
~~Jones Financial Companies LLLP~~
~~Lockheed Martin Corporation~~
~~Hudson City Bancorp, Inc.~~
~~Jones Lang LaSalle~~
~~Loews Corporation~~
~~Hu-Friedy Manufacturing Company, Inc.~~
~~Jostens, Inc.~~
~~Lorillard, Inc.~~
~~Humana, Inc.~~
~~Joy Global, Inc.~~
~~Los Angeles Unified School District~~
~~Hunter Industries~~
~~JPMorgan Chase & Company~~
~~Louisiana Pacific~~
~~Huntington Bancshares~~
~~Judicial Council of California~~
~~Lowe’s Companies, Inc.~~
~~Huntsman Corporation~~
~~Juniper Networks, Inc.~~
~~Lower Colorado River Authority~~
~~Huron Consulting Group~~
~~K Hovnanian Companies LLC~~
~~Lozier Corporation~~
~~Hutchinson Technology Incorporated~~
~~Kalsec, Inc.~~
~~LPL Investment Holdings, Inc.~~
~~Hyatt Hotels Corporation~~
~~Kansas Farm Bureau~~
~~LSG Sky Chefs~~
~~Hyundai Motor Manufacturing of Alabama~~
~~KAR Auction Services, Inc.~~
~~LSI Corporation~~
~~IAC/Interactivecorp~~
~~Katun Corporation~~
~~Lubrizol Corporation~~
~~Icahn Enterprises LP~~
~~KB Home~~
~~Lufthansa AirPlus Servicekarten GmbH~~
~~IDEX Corporation~~
~~KBR, Inc.~~
~~Luther Midelfort-Mayo Health System~~
~~IDEXX Laboratories, Inc.~~
~~Keihin North America~~
~~Lutron Electronics~~
~~IDT Corporation~~
~~Kellogg Company~~
~~Luxottica Retail~~
~~IKON Office Solutions~~
~~Kelly Services, Inc.~~
~~M & F Worldwide Corporation~~
~~Illinois Tool Works, Inc.~~
~~Kettering University~~
~~M & T Bank Corporation~~
~~Imation Corporation~~
~~Kewaunee Scientific Corporation~~
~~Macy’s, Inc.~~
~~IMS Health, Inc.~~
~~Keycorp~~
~~Magellan Health Services~~
~~Indiana Farm Bureau Insurance~~
~~Keystone Automotive Industries~~
~~Magna Seating Systems Engineering~~
~~Inergy Holdings LP~~
~~Keystone Foods Corporation~~
~~Malco Products, Inc.~~
~~Information Management Service~~
~~KI, Inc.~~
~~Malt-O-Meal~~
~~Ingersoll Rand~~
~~Kimberly-Clark Corporation~~
~~Manitowoc Company~~
~~Ingles Markets, Inc.~~
~~Kimley-Horn and Associates, Inc.~~
~~MANN+HUMMEL USA, Inc.~~
~~Ingram Industries, Inc.~~
~~Kinder Morgan Energy~~
~~Manpower International, Inc.~~
~~Ingram Micro, Inc.~~
~~Kindred Healthcare~~
~~Manpower, Inc.~~
~~Insight Enterprises, Inc.~~
~~Kinetic Concepts, Inc.~~
~~ManTech International~~
~~In-Sink-Erator~~
~~King Pharmaceuticals, Inc.~~
~~MAPFRE USA, Corporation~~
~~Institute for Defense Analyses~~
~~Kingston Technology~~
~~Marathon Oil Corporation~~
~~Institute of Nuclear Power Operations~~
~~Klein Tools~~
~~Maricopa County Office of~~
~~Insurance Auto Auctions~~
~~Kohler Company~~
~~Management & Budget~~
~~Integrys Energy Group, Inc.~~
~~Kohls Corporation~~
~~Maricopa Integrated Health System~~
~~Intel Corporation~~
~~Komatsu America Corporation~~
~~Maritz, Inc.~~
~~Interbake Foods, Inc.~~
~~Kraft Foods, Inc.~~
~~Markel Corporation~~
~~InterMetro Industries Corporation~~
~~L. L. Bean, Inc.~~
~~Market Planning Solutions, Inc.~~
~~International Assets Holding Company~~
~~L-3 Communications Holdings, Inc.~~
~~Marriott International, Inc.~~
~~International Business Machines Corporation~~
~~L-3 Communications, Global Security &~~
~~Mars North America~~
~~International Dairy Queen, Inc.~~
~~Engineering Solutions~~
~~Marsh & McLennan Companies~~
~~International Flavors & Fragrances~~
~~La Macchia Enterprises~~
~~Marshall & Ilsley Corporation~~
~~International Game Technology~~
~~Lab Volt Systems~~
~~Marshfield Clinic~~
~~International Paper Company~~
~~Laboratory Corporation of America Holdings~~
~~MARTA~~
~~Interpublic Group of Companies~~
~~Laclede Group, Inc.~~
~~Martin Marietta Materials, Inc.~~
~~Intertape Polymer Group~~
~~Lake Federal Bank~~
~~Mary Kay, Inc.~~
~~Intuit, Inc.~~
~~Lake Forest Academy~~
~~Maryland Department of Transportation~~
~~Invacare Corporation~~
~~Lake Region Medical~~
~~Masco Corporation~~
~~Invensys Controls~~
~~Lance, Inc.~~
~~Massey Energy Company~~
~~Iron Mountain Canada Corporation~~
~~Landstar System, Inc.~~
~~MasTec, Inc.~~
~~The Irvine Company~~
~~Lantech.com~~
~~Master Halco~~
~~Ithaca College~~
~~Las Vegas Sands Corporation~~
~~Mattel, Inc.~~
~~Itochu International, Inc.~~
~~Leap Wireless International, Inc.~~
~~Maxim Integrated Products, Inc.~~
~~Itron, Inc.~~
~~Lear Corporation~~
~~Mayo Clinic~~

~~A-10~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

~~McAfee, Inc.~~
~~Nature’s Sunshine Products, Inc.~~
~~Packaging Corporation of America~~
~~McCormick & Company, Inc.~~
~~Navistar International Corporation~~
~~Pactiv Corporation~~
~~McDonald’s Corporation~~
~~Navy Exchange Service Command~~
~~Pall Corporation~~
~~MCG Health, Inc.~~
~~NBTY, Inc.~~
~~The Pampered Chef~~
~~McGraw-Hill Companies~~
~~NCCI Holdings, Inc.~~
~~Panduit Corporation~~
~~McKesson Medical-Surgical~~
~~NCR Corporation~~
~~Pantry, Inc.~~
~~MDU Resources Group, Inc. (WBI Holdings)~~
~~Nebraska Public Power District~~
~~Papa John’s International~~
~~MeadWestvaco Corporation~~
~~Neiman Marcus~~
~~Parsons Child & Family Center~~
~~Mecklenburg County~~
~~Netflix, Inc.~~
~~Patterson Companies, Inc.~~
~~Medco Health Solutions, Inc.~~
~~New Jersey Resources Corporation~~
~~PC Connection, Inc.~~
~~Media General, Inc.~~
~~New York Times Company~~
~~Peabody Energy Corporation~~
~~Medline Industries~~
~~Newell Rubbermaid, Inc.~~
~~Pearson Education~~
~~Men’s Wearhouse, Inc.~~
~~Newmont Mining Corporation~~
~~Penn National Gaming, Inc.~~
~~Mercer University~~
~~NewPage Corporation~~
~~Penn State Hershey Medical Center~~
~~Merck & Company~~
~~Nicor Gas~~
~~Penske Automotive Group, Inc.~~
~~Mercury General Corporation~~
~~Nicor, Inc.~~
~~Pentair, Inc.~~
~~Merit Medical Systems~~
~~The Nielsen Company~~
~~Pep Boys–Manny Moe & Jack~~
~~MeritCare Health System~~
~~NII Holdings, Inc.~~
~~Pepco Holdings, Inc.~~
~~Merrill Corporation~~
~~NiSource Corporate Services~~
~~Pepsi Bottling Group, Inc.~~
~~The Methodist Hospital~~
~~Nissin Foods (USA) Company, Inc.~~
~~PepsiCo, Inc.~~
~~MetroPCS Communications, Inc.~~
~~NJM Insurance Group~~
~~Perkinelmer, Inc.~~
~~Metropolitan Life Insurance Company~~
~~Noble Energy, Inc.~~
~~Petsmart, Inc.~~
~~Metropolitan Transit Authority~~
~~The Nordam Group~~
~~Pfizer, Inc.~~
~~Mettler-Toledo International, Inc.~~
~~Nordson Corporation~~
~~PG&E Corporation~~
~~MFS Investment Management~~
~~Nordstrom~~
~~Pharmavite LLC~~
~~MGIC Investment Corporation~~
~~Nordstrom, Inc.~~
~~Pharmerica Corporation~~
~~MGM Mirage~~
~~Norfolk Southern Corporation~~
~~PHH Arval~~
~~Miami Children’s Hospital~~
~~North Carolina State Employees’ Credit Union~~
~~PHH Corporation~~
~~Miami Dade Community College~~
~~North Texas Tollway Authority~~
~~PHI, Inc.~~
~~Michael Baker Corporation~~
~~Northeast Utilities~~
~~Philip Morris International, Inc.~~
~~Michael Foods, Inc.~~
~~Northern Trust Corporation~~
~~Phillips – Van Heusen Corporation~~
~~Michaels Stores, Inc.~~
~~Northrop Grumman Corporation~~
~~Phoenix Companies, Inc.~~
~~Micron Technology, Inc.~~
~~Northwestern Mutual~~
~~Picerne Military Housing~~
~~Midwest Research Institute~~
~~NovaMed Corporation~~
~~Piedmont Natural Gas Company, Inc.~~
~~Mike Albert Leasing, Inc.~~
~~NRG Energy, Inc.~~
~~Pier 1 Imports~~
~~Millennium Inorganic Chemicals~~
~~NRUCFC~~
~~Pilgrim’s Pride Corporation~~
~~Mine Safety Appliances Company~~
~~Nstar~~
~~Pinnacle Airlines~~
~~Minnesota Management & Budget~~
~~Nucor Corporation~~
~~Pinnacle Foods Finance LLC~~
~~Mirant Corporation~~
~~NuStar Energy LP~~
~~Pinnacle West Capital Corporation~~
~~Mission Foods~~
~~NV Energy, Inc.~~
~~Pinnacol Assurance~~
~~Missouri Department of Conservation~~
~~NVIDIA Corporation~~
~~Pioneer Natural Resources Company~~
~~Missouri Department of Transportation~~
~~NVR, Inc.~~
~~Pitney Bowes, Inc.~~
~~Mitsubishi International Corporation~~
~~NYSE Euronext~~
~~Plains All American Pipeline LP~~
~~Mitsubishi Motor Manufacturing~~
~~O’Reilly Automotive, Inc.~~
~~Plexus Corporation~~
~~MMS Consultants, Inc.~~
~~Occidental Petroleum Corporation~~
~~PM Company~~
~~Mohawk Industries~~
~~Oceaneering International~~
~~PNC Financial Services Group, Inc.~~
~~Mohegan Sun Casino~~
~~Oerlikon Balzers Coating USA, Inc.~~
~~PNM Resources, Inc.~~
~~Molex, Inc.~~
~~Office Depot, Inc.~~
~~Polaris Industries, Inc.~~
~~Molina Health Care, Inc.~~
~~OfficeMax~~
~~Polymer Technologies~~
~~Molson Coors Brewing Company~~
~~OGE Energy Corporation~~
~~Polyone Corporation~~
~~Momentive Performance Materials, Inc.~~
~~Ohio Public Employees Retirement System~~
~~Popular, Inc.~~
~~Monsanto Company~~
~~Ohio State University~~
~~Port Authority of Allegheny County~~
~~Moody’s Corporation~~
~~The Ohio State University Medical Center~~
~~Port of Portland~~
~~Moog, Inc.~~
~~Ohio University~~
~~Portland General Electric Company~~
~~Morgan Stanley~~
~~OHL~~
~~Poudre Valley Health Systems~~
~~Motorola, Inc.~~
~~Oil States International, Inc.~~
~~PPG Industries, Inc.~~
~~MTA Long Island Bus~~
~~Oil-Dri Corporation of America~~
~~PPL Corporation~~
~~MTD Products, Inc.~~
~~Old Dominion Electric Cooperative~~
~~Praxair, Inc.~~
~~MTS System Corporation~~
~~Old Republic Companies~~
~~Preformed Line Products Company~~
~~Mueller Industries, Inc.~~
~~Omnicare, Inc.~~
~~Premera Blue Cross~~
~~Murphy Oil Corporation~~
~~Omnicom Group~~
~~Priceline.com, Inc.~~
~~Mutual of Enumclaw Insurance Company~~
~~Omnova Solutions, Inc.~~
~~Pride International, Inc.~~
~~Mutual of Omaha~~
~~ON Semiconductor Corporation~~
~~Prince William Health System~~
~~Mylan, Inc.~~
~~ONEOK, Inc.~~
~~Principal Financial Group, Inc.~~
~~NACCO Industries, Inc.~~
~~The Oppenheimer Group~~
~~Probuild Holdings, Inc.~~
~~Nalco Holding Company~~
~~Orange County Government~~
~~Progress Energy, Inc.~~
~~NASDAQ OMX Group, Inc.~~
~~Orbital Science Corporation~~
~~Progressive Corporation~~
~~Nash Finch Company~~
~~Oregon State Lottery~~
~~Project Management Institute~~
~~National Academies~~
~~Oshkosh Corporation~~
~~Property Casualty Insurers Association~~
~~National Fuel Gas Company~~
~~Owens & Minor, Inc.~~
~~of America~~
~~National Futures Association~~
~~Owens Corning~~
~~Protective Life Corporation~~
~~National Interstate Insurance Company~~
~~Owens-Illinois, Inc.~~
~~Prudential Financial, Inc.~~
~~National Oilwell Varco, Inc.~~
~~Oxford Industries~~
~~Psion Teklogix, Inc.~~
~~National Safety Council~~
~~PACCAR, Inc.~~
~~Psychiatric Solutions, Inc.~~
~~National Tobacco Company~~
~~Pacer International, Inc.~~
~~Public Service Enterprise Group, Inc.~~

~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
~~A-11~~

~~Proxy Statement~~

~~Public Storage~~
~~SAIC, Inc.~~
~~Sonoco Products Company~~
~~Public Utility District #1 of Chelan County~~
~~Saks, Inc.~~
~~Source Interlink Companies, Inc.~~
~~Publix Super Markets, Inc.~~
~~Sakura Finetek USA, Inc.~~
~~South Jersey Gas Company~~
~~Puget Energy, Inc.~~
~~Salk Institute~~
~~Southco, Inc.~~
~~Pultegroup, Inc.~~
~~Sally Beauty Holdings, Inc.~~
~~Southeastern Freight Lines~~
~~QSC Audio Products, Inc.~~
~~Salt River Project~~
~~Southern Company~~
~~QTI Human Resources~~
~~Samuel Roberts Noble Foundation~~
~~Southern Poverty Law Center~~
~~Qualcomm, Inc.~~
~~San Antonio Water System~~
~~Southern Union Company~~
~~Quality Bicycle Products~~
~~San Manuel Band of Mission Indians~~
~~Southwest Airlines~~
~~Quanta Services, Inc.~~
~~Sanderson Farms, Inc.~~
~~Southwest Gas Corporation~~
~~Quest Diagnostics Incorporated~~
~~Sandisk Corporation~~
~~Southwestern Energy Company~~
~~Questar Corporation~~
~~Sanmina-Sci Corporation~~
~~Space Dynamics Lab~~
~~Quiksilver, Inc.~~
~~SAS Institute, Inc.~~
~~Space Telescope Science Institute~~
~~Qwest Communications International, Inc.~~
~~Sauer-Danfoss, Inc.~~
~~Spectra Energy Corporation~~
~~R L I Insurance Company~~
~~Savannah River Nuclear Solutions LLC~~
~~Spectrum Brands, Inc.~~
~~R L Polk & Company~~
~~Save Mart~~
~~Spectrum Group International, Inc.~~
~~Radio One~~
~~SCANA Corporation~~
~~Spectrum Health – Downtown~~
~~Radioshack Corporation~~
~~Scansource, Inc.~~
~~Sprint Nextel Corporation~~
~~Ralcorp Holdings, Inc.~~
~~SCF Arizona~~
~~SPX Corporation~~
~~The Raymond Corporation~~
~~Schaumburg Township District Library~~
~~St. Cloud Hospital~~
~~Raymond James Financial~~
~~Schein Henry, Inc.~~
~~St. John Health System~~
~~Raytheon Company~~
~~Schneider Electric~~
~~St. Jude Children’s Research Hospital~~
~~REA Magnet Wire Company, Inc.~~
~~Schneider National, Inc.~~
~~St. Jude Medical, Inc.~~
~~Realogy Corporation~~
~~Schnitzer Steel Industries~~
~~St. Louis County Government~~
~~Recology~~
~~Schwan Food Company~~
~~St. Luke’s Episcopal Health System~~
~~Red Wing Shoe Company~~
~~Scientific Research Corporation~~
~~St. Mary’s at Amsterdam~~
~~Redcats USA~~
~~The Scooter Store~~
~~St. Vincent Hospital~~
~~Regal Entertainment Group~~
~~Scott & White Hospital~~
~~Stampin’ Up!~~
~~Regal-Beloit~~
~~Scotts Miracle-Gro Company~~
~~Stancorp Financial Group, Inc.~~
~~The Regence Group~~
~~Scripps Networks Interactive, Inc.~~
~~Standard Motor Products, Inc.~~
~~Regency Centers Corporation~~
~~Seaboard Corporation~~
~~Stanley Black & Decker, Inc.~~
~~Regions Financial Corporation~~
~~Seacoast National Bank~~
~~Staples, Inc.~~
~~Reinsurance Group of America~~
~~Seacor Holdings, Inc.~~
~~Starbucks Corporation~~
~~Reliance Steel & Aluminum Company~~
~~Sealed Air Corporation~~
~~Starwood Hotels & Resorts Worldwide~~
~~Remington Arms Company, Inc.~~
~~Sealy, Inc.~~
~~State Corporation Commission~~
~~Renaissance Learning, Inc.~~
~~Seaman Corporation~~
~~State of Oregon~~
~~Renown Health~~
~~Sears Holdings Corporation~~
~~State Personnel Administration~~
~~Rent-A-Center, Inc.~~
~~Seco Tools, Inc.~~
~~State Street Corporation~~
~~Republic Services, Inc.~~
~~Select Medical Holdings Corporation~~
~~Stater Bros. Holdings, Inc.~~
~~Res-Care, Inc.~~
~~Selective Insurance Group, Inc.~~
~~Steel Dynamics, Inc.~~
~~Rexel, Inc.~~
~~SEMCO Energy~~
~~Steel Technologies-Corporate~~
~~Reynolds American, Inc.~~
~~SemGroup Corporation~~
~~Steelcase, Inc.~~
~~Rice University~~
~~Sempra Energy~~
~~Stepan Company~~
~~RiceTec, Inc.~~
~~Sentara Healthcare~~
~~Sterilite Corporation~~
~~Rich Products Corporation~~
~~Sentry Group~~
~~STERIS~~
~~Richco~~
~~Sentry Insurance~~
~~Sterling Bank~~
~~Ricoh Electronics, Inc.~~
~~Serco, Inc.~~
~~Stewart & Stevenson~~
~~Rite – Hite Holding Corporation~~
~~Service Corporation International~~
~~Stewart Information Services~~
~~Robert Bosch LLC~~
~~The ServiceMaster Company~~
~~Stonyfield Farm, Inc.~~
~~Robert Bosch Tool Corporation~~
~~Seventh Generation~~
~~Stryker Corporation~~
~~Robert Half International, Inc.~~
~~SFN Group, Inc.~~
~~Subuaru of Indiana Automotive, Inc.~~
~~Roche Diagnostics~~
~~Shands HealthCare~~
~~Sulzer Pumps US, Inc.~~
~~Rock-Tenn Company~~
~~Sharp Electronics Corporation~~
~~Sun Healthcare Group, Inc.~~
~~Rockwell Automation~~
~~Shaw Group, Inc.~~
~~Sun Microsystems, Inc.~~
~~Rockwell Collins, Inc.~~
~~Sherwin-Williams Company~~
~~Suncoast Schools Federal Credit Union~~
~~Rockwood Holdings, Inc.~~
~~Sigma Aldrich~~
~~Sungard Data Systems, Inc.~~
~~Rollins, Inc.~~
~~Sigma-Aldrich Corporation~~
~~Sunoco, Inc.~~
~~Roper Industries~~
~~Silgan Holdings, Inc.~~
~~Sunrise Senior Living, Inc.~~
~~Roper Industries, Inc.~~
~~Simmons Bedding Company~~
~~Sunstar Americas~~
~~Ross Stores, Inc.~~
~~Simon Property Group, Inc.~~
~~Suntrust Banks, Inc.~~
~~Rowan Companies, Inc.~~
~~Sirius XM Radio, Inc.~~
~~Supermedia, Inc.~~
~~Royal Bank of Canada~~
~~Sitel~~
~~SuperValue~~
~~Royal Caribbean Cruise Line~~
~~SJE-Rhombus~~
~~Susser Holdings Corporation~~
~~RR Donnelley & Sons Company~~
~~Skywest, Inc.~~
~~Sutter Health~~
~~RRI Energy~~
~~SLM Corporation~~
~~Swiss Reinsurance~~
~~RSC Equipment Rental~~
~~Smead Manufacturing Company~~
~~Sykes Enterprises~~
~~RSM McGladrey~~
~~SMSC Gaming Enterprise~~
~~Symetra Financial Corporation~~
~~Ruddick Corporation~~
~~Smurfit-Stone Container Corporation~~
~~SYNNEX Corporation~~
~~Ryder System, Inc.~~
~~Snap-On, Inc.~~
~~Synovate~~
~~The Ryland Group~~
~~Snyder’s of Hanover~~
~~Synovus Financial Corporation~~
~~S&C Electric Company~~
~~Solae LLC~~
~~Synthes~~
~~Safety-Kleen Systems, Inc.~~
~~Sole Technology, Inc.~~
~~SYSCO Corporation~~
~~Safeway, Inc.~~
~~Solo Cup Company~~
~~Systemax, Inc.~~
~~Safilo USA~~
~~Solutia, Inc.~~
~~T. Rowe Price Group~~
~~SAGE Publications~~
~~Sonic Automotive, Inc.~~
~~Targa Resources Partners LP~~

~~A-12~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

~~Target Corporation~~
~~Unilife Corporation~~
~~Virgin Media, Inc.~~
~~Tastefully Simple~~
~~Union Pacific Corporation~~
~~Visa, Inc.~~
~~The Taubman Company~~
~~Unisys Corporation~~
~~Vishay Intertechnology, Inc.~~
~~Taylor Corporation~~
~~United HealthCare Group~~
~~Visiting Nurse Association of the Inland~~
~~TD Ameritrade Holding Corporation~~
~~United Natural Foods, Inc.~~
~~Counties~~
~~TDS Telecom Corporation~~
~~United Parcel Service, Inc.~~
~~Visiting Nurse Service of New York~~
~~Team Health Holdings, Inc.~~
~~United Refining Company~~
~~Visteon Corporation~~
~~Tech Data Corporation~~
~~United Rentals, Inc.~~
~~Volvo Group North America~~
~~TECO Energy, Inc.~~
~~United States Steel Corporation~~
~~Vornado Realty Trust~~
~~Tecolote Research, Inc.~~
~~United Stationers, Inc.~~
~~Vought Aircraft Industries, Inc.~~
~~TelAlaska, Inc.~~
~~United Technologies Corporation~~
~~Vulcan Materials Company~~
~~Tele-Consultants, Inc.~~
~~United Way for Southeastern Michigan~~
~~W C Bradley Company~~
~~Teledyne Technologies, Inc.~~
~~Unitrin, Inc.~~
~~W R Grace & Company~~
~~Teleflex~~
~~Universal American Corporation~~
~~W.R. Berkley Corporation~~
~~Telephone & Data Systems, Inc.~~
~~Universal Forest Prods, Inc.~~
~~W.W. Grainger, Inc.~~
~~Tellabs Operations, Inc.~~
~~Universal Health Services~~
~~Wackenhut Services, Inc.~~
~~Temple-Inland, Inc.~~
~~Universal Orlando~~
~~Wake County Government~~
~~Tenaris, Inc.~~
~~University of Alabama at Birmingham~~
~~Walgreen Company~~
~~Tenet Healthcare Corporation~~
~~University of Arkansas for Medical Science~~
~~Wal-Mart Stores, Inc.~~
~~Tenneco, Inc.~~
~~The University of Chicago~~
~~Walt Disney Company~~
~~Teradata Corporation~~
~~University of Georgia~~
~~Walter Energy~~
~~Terex Corporation~~
~~University of Houston~~
~~Warnaco Group, Inc.~~
~~Terra Industries, Inc.~~
~~University of Kansas Hospital~~
~~Warner Music Group Corporation~~
~~Tescom Corporation~~
~~University of Louisville~~
~~Washington Post~~
~~Tesoro Corporation~~
~~University of Maryland Medical Center~~
~~Washington Suburban Sanitary Commission~~
~~Tetra Tech, Inc.~~
~~University of Miami~~
~~Washington University in St. Louis~~
~~Texas County & District Retirement System~~
~~University of Michigan~~
~~Waste Industries, Inc.~~
~~Texas Industries, Inc.~~
~~University of Minnesota~~
~~Waste Management, Inc.~~
~~Texas Instruments, Inc.~~
~~University of Nebraska-Lincoln~~
~~Watsco, Inc.~~
~~Texas Mutual Insurance Company~~
~~University of Notre Dame~~
~~Watson Pharmaceuticals, Inc.~~
~~Textron, Inc.~~
~~University of Pennsylvania~~
~~Wawa, Inc.~~
~~Thermo Fisher Scientific, Inc.~~
~~University of Rochester~~
~~Wayne Memorial Hospital~~
~~Thomas & Betts Corporation~~
~~University of South Florida~~
~~Wellcare Health Plans~~
~~TI Group Automotive Systems LLC~~
~~University of St. Thomas~~
~~Wellmark BlueCross BlueShield~~
~~Tiffany & Co.~~
~~University of Texas at Austin~~
~~Wellpoint, Inc.~~
~~The Timberland Company~~
~~University of Texas Health Science Center~~
~~Wendy’s/Arby’s Group, Inc.~~
~~Time Warner Cable~~
~~The University of Texas M.D. Anderson~~
~~Werner Company~~
~~Time Warner, Inc.~~
~~Cancer Center~~
~~Werner Enterprises, Inc.~~
~~TIMET~~
~~University of Texas Southwestern~~
~~WESCO International, Inc.~~
~~Timken Company~~
~~Medical Center~~
~~West Penn Allegheny Health System~~
~~TJX Companies, Inc.~~
~~University of Wisconsin Medical Foundation~~
~~West Pharmaceutical Services~~
~~Toll Brothers, Inc.~~
~~University Physicians, Inc.~~
~~West Virginia University Hospitals, Inc.~~
~~Torchmark Corporation~~
~~Unum Group~~
~~Westar Energy, Inc.~~
~~The Toro Company~~
~~UPS~~
~~Western Refining, Inc.~~
~~Toys R Us, Inc.~~
~~Urban Outfitters, Inc.~~
~~Western Southern Financial Group~~
~~Tractor Supply Company~~
~~URS Corporation~~
~~Western Textile Companies~~
~~Travelcenters of America LLC~~
~~US Airways Group, Inc.~~
~~Western Union Company~~
~~Travelers Companies, Inc.~~
~~US Bancorp~~
~~Westfield Group~~
~~Travis County~~
~~US Foodservices~~
~~Westlake Chemical Corporation~~
~~Treasure Island Resort & Casino~~
~~US Oncology Holdings, Inc.~~
~~Weston Solutions, Inc.~~
~~Tremco, Inc.~~
~~USAA~~
~~Weyerhaeuser Company~~
~~Tribune Company~~
~~USEC, Inc.~~
~~WGL Holdings, Inc.~~
~~Tri-Met~~
~~USG Corporation~~
~~Wheaton Franciscan Healthcare~~
~~Trinity Health~~
~~Utah Transit Authority~~
~~Wheels, Inc.~~
~~Trinity Industries~~
~~Utica National Insurance~~
~~Whirlpool Corporation~~
~~Triple-S Management Corporation~~
~~Vail Resorts Management Company~~
~~Whole Foods Market, Inc.~~
~~Triwest Healthcare Alliance~~
~~Valassis Communications, Inc.~~
~~Wilbur Smith Associates~~
~~TruckPro, Inc.~~
~~Valero Energy Corporation~~
~~The Wilder Foundation~~
~~True Value Company~~
~~Valhi, Inc.~~
~~Williams Companies, Inc.~~
~~TRW Automotive Holdings Corporation~~
~~Valmont Industries, Inc.~~
~~Williams-Sonoma, Inc.~~
~~TSYS~~
~~Van Andel Institute~~
~~Wilmer Hale~~
~~Tufts Health Plan~~
~~Vangent, Inc.~~
~~Wilsonart International~~
~~Tupperware Corporation~~
~~Varian Medical Systems, Inc.~~
~~Windstream Communications~~
~~Turner Broadcasting System, Inc.~~
~~Vectren Corporation~~
~~Winn-Dixie Stores, Inc.~~
~~Tutor Perini Corporation~~
~~Venetian Resort-Hotel-Casino~~
~~Winpak Portion Packaging, Ltd.~~
~~Tyco Electronics~~
~~Ventura Foods LLC~~
~~Wisconsin Energy Corporation~~
~~Tyson Foods, Inc.~~
~~Venturedyne, Ltd.~~
~~Wisconsin Physicians Service~~
~~UAL Corporation~~
~~Verde Realty~~
~~Insurance Corporation~~
~~UDR~~
~~Verizon Communications, Inc.~~
~~Wolverine World Wide, Inc.~~
~~UGI Corporation~~
~~Vermeer Manufacturing Company~~
~~World Fuel Services Corporation~~
~~UMB Bank NA~~
~~VF Corporation~~
~~World Vision International~~
~~UMDNJ-University of Medicine & Dentistry~~
~~Via Christi Regional Medical Center~~
~~Worthington Industries~~
~~Underwriters Laboratories, Inc.~~
~~Viacom, Inc.~~
~~Wyle Laboratories~~
~~Unified Grocers, Inc.~~
~~Viant Health Payment Solutions~~
~~Wyndham Worldwide Corporation~~
~~Unified Personnel System~~
~~Viejas Enterprise~~
~~Wynn Resorts, Ltd.~~

~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
~~A-13~~

~~Proxy Statement~~

~~Xcel Energy, Inc.~~
~~Xerox Corporation~~
~~Yahoo, Inc.~~
~~Yamaha Corporation of America~~
~~Yankee Candle Company~~
~~YKK Corporation of America~~
~~YSI~~
~~Yum Brands, Inc.~~
~~Zale Corporation~~
~~Zeon Chemicals LP~~
~~Zimmer, Inc.~~
~~Zions Bancorporation~~

~~A-14~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~Proxy Statement~~

~~EXHIBIT B~~
~~Companies Surveyed using Equilar, Inc.~~
~~MDU Resources Group, Inc. – President & Chief Executive Officer~~
~~Competitive Analysis to Determine Base Salary, Target Annual Cash Compensation,~~
~~and Target Total Direct Compensation~~

~~AGL Resources Inc.~~
~~Alliant Energy Corp.~~
~~Ameren Corp.~~
~~ARC Resources Ltd.~~
~~Atmos Energy Corp.~~
~~Avista Corp.~~
~~Berry Petroleum Co.~~
~~Black Hills Corp.~~
~~Boardwalk Pipeline Partners, LP~~
~~Chicago Bridge & Iron Co.~~
~~Cimarex Energy Co.~~
~~CMS Energy Corp.~~
~~Comfort Systems USA Inc.~~
~~Compass Minerals International Inc.~~
~~Complete Production Services, Inc.~~
~~Comstock Resources Inc.~~
~~DCP Midstream Partners, LP~~
~~Denbury Resources Inc.~~
~~Diamond Offshore Drilling, Inc.~~
~~DPL Inc.~~
~~El Paso Corp.~~
~~EMCOR Group, Inc.~~
~~Energen Corp.~~
~~Energy Transfer Equity, L.P.~~
~~Enerplus Corp.~~
~~Ensco plc~~
~~EOG Resources, Inc.~~
~~EQT Corp.~~
~~Foster Wheeler AG~~
~~Granite Construction Inc.~~
~~Helix Energy Solutions Group, Inc.~~
~~Helmerich & Payne, Inc.~~
~~Integrys Energy Group, Inc.~~
~~Key Energy Services Inc.~~
~~Laclede Group, Inc.~~
~~Layne Christenson Co.~~
~~MarkWest Energy Partners, L.P.~~
~~Martin Marietta Materials, Inc.~~
~~MasTec, Inc.~~
~~Nabors Industries Ltd.~~
~~National Fuel Gas Co.~~
~~New Jersey Resources Corp.~~
~~Newfield Exploration Co.~~
~~Nexen Inc.~~
~~Nicor Inc.~~
~~NiSource Inc.~~
~~Noble Corp.~~
~~Noble Energy Inc.~~
~~Northwest Natural Gas Co.~~
~~NorthWestern Corp.~~
~~NV Energy Inc.~~
~~Oceaneering International Inc.~~
~~Patterson UTI Energy Inc.~~
~~Pengrowth Energy Corp.~~
~~Penn West Petroleum Ltd.~~
~~Pepco Holdings, Inc.~~
~~Petrohawk Energy Corp.~~
~~Piedmont Natural Gas Co. Inc.~~
~~Pike Electric Corp.~~
~~Pioneer Natural Resources Co.~~
~~Plains Exploration & Production Co.~~
~~Precision Drilling Corp.~~
~~Pride International Inc.~~
~~QEP Resources, Inc.~~
~~Quanta Services, Inc.~~
~~Questar Corp.~~
~~Range Resources Corp.~~
~~Regency Energy Partners LP~~
~~Rowan Companies Inc.~~
~~RPC Inc.~~
~~SCANA Corp.~~
~~SM Energy Co.~~
~~Southern Union Co.~~
~~Southwest Gas Corp.~~
~~Southwestern Energy Co.~~
~~Spectra Energy Corp.~~
~~Sterling Construction Co. Inc.~~
~~Superior Energy Services Inc.~~
~~Swift Energy Co.~~
~~Talisman Energy Inc.~~
~~Targa Resources Partners LP~~
~~Texas Industries Inc.~~
~~TransCanada Corp.~~
~~UGI Corp.~~
~~USEC Inc.~~
~~Vectren Corp.~~
~~Vulcan Materials Co.~~
~~Westar Energy Inc.~~
~~WGL Holdings, Inc.~~
~~Whiting Petroleum Corp.~~
~~Willbros Group, Inc.~~
~~Wisconsin Energy Corp.~~

~~Companies Surveyed using~~
~~Equilar, Inc.~~
~~MDU Resources Group, Inc. –~~
~~Vice President & Chief~~
~~Financial Officer~~
~~Competitive Analysis to~~
~~Determine Base Salary,~~
~~Target Annual Cash~~
~~Compensation, and Target Total~~
~~Direct Compensation~~

~~Alliant Energy Corp.~~
~~Ameren Corp.~~
~~ARC Resources Ltd.~~
~~Atmos Energy Corp.~~
~~Avista Corp.~~
~~Berry Petroleum Co.~~
~~BJ Services Co.~~
~~Black Hills Corp.~~
~~Chicago Bridge & Iron Co.~~
~~Cimarex Energy Co.~~
~~CMS Energy Corp.~~
~~Comfort Systems USA Inc.~~
~~Compass Minerals International Inc.~~
~~Complete Production Services, Inc.~~
~~Comstock Resources Inc.~~
~~Denbury Resources Inc.~~
~~Diamond Offshore Drilling, Inc.~~
~~DPL Inc.~~
~~EMCOR Group, Inc.~~
~~Enerplus Corp.~~
~~Ensco plc~~
~~EOG Resources, Inc.~~
~~EQT Corp.~~
~~Foster Wheeler AG~~
~~Granite Construction Inc.~~
~~Helix Energy Solutions Group, Inc.~~
~~Helmerich & Payne, Inc.~~
~~Integrys Energy Group, Inc.~~
~~Key Energy Services Inc.~~
~~Layne Christenson Co.~~
~~MarkWest Energy Partners, L.P.~~
~~Martin Marietta Materials, Inc.~~
~~MasTec, Inc.~~
~~Nabors Industries Ltd.~~
~~National Fuel Gas Co.~~
~~Newfield Exploration Co.~~
~~Nexen Inc.~~
~~NiSource Inc.~~
~~Noble Corp.~~
~~Noble Energy Inc.~~
~~Northwest Natural Gas Co.~~
~~NorthWestern Corp.~~
~~NV Energy Inc.~~
~~Oceaneering International Inc.~~
~~Patterson UTI Energy Inc.~~
~~Pengrowth Energy Corp.~~
~~Penn West Petroleum Ltd.~~
~~Pepco Holdings, Inc.~~
~~Petrohawk Energy Corp.~~
~~Pike Electric Corp.~~
~~Pioneer Natural Resources Co.~~
~~Plains Exploration & Production Co.~~
~~Precision Drilling Corp~~
~~Pride International Inc.~~
~~QEP Resources, Inc.~~
~~Quanta Services, Inc.~~
~~Questar Corp.~~
~~Range Resources Corp.~~
~~Regency Energy Partners LP~~
~~Rowan Companies Inc.~~
~~RPC Inc.~~
~~SCANA Corp.~~
~~SM Energy Co.~~
~~Southern Union Co.~~
~~Southwest Gas Corp.~~
~~Southwestern Energy Co.~~
~~Sterling Construction Co. Inc.~~
~~Superior Energy Services Inc.~~
~~Swift Energy Co.~~
~~Talisman Energy Inc.~~
~~Texas Industries Inc.~~
~~UGI Corp.~~
~~USEC Inc.~~
~~Vectren Corp.~~
~~Vulcan Materials Co.~~
~~Westar Energy Inc.~~
~~Whiting Petroleum Corp.~~
~~Willbros Group, Inc.~~
~~Wisconsin Energy Corp.~~

~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~
~~B-1~~

~~Proxy Statement~~

~~Companies Surveyed using Equilar, Inc.~~
~~Exploration and Production Segment – President & Chief Executive Officer~~
~~Competitive Analysis to Determine Base Salary, Target Annual Cash Compensation,~~
~~and Target Total Direct Compensation~~
~~Advantage Oil & Gas Ltd.~~
~~ATP Oil & Gas Corp.~~
~~Atwood Oceanics Inc.~~
~~Berry Petroleum Co.~~
~~Bill Barrett~~
~~BreitBurn Energy Partners L.P.~~
~~Cabot Oil & Gas Corp.~~
~~Cheniere Energy, Inc.~~
~~Clayton Williams Energy, Inc.~~
~~Comstock Resources Inc~~
~~Continental Resources Inc.~~
~~Eagle Rock Energy Partners L.P.~~
~~Energy XXI (Bermuda) Ltd.~~
~~EQT Corp.~~
~~EXCO Resources Inc.~~
~~Geokinetics Inc.~~
~~Global Geophysical Services Inc.~~
~~Gran Tierra Energy Inc.~~
~~Hercules Offshore, Inc.~~
~~Ion Geophysical~~
~~Linn Energy, LLC~~
~~Parker Drilling Co.~~
~~Penn Virginia Corp.~~
~~Petroleum Development Corp.~~
~~Pioneer Drilling Co.~~
~~Rosetta Resources Inc.~~
~~SM Energy Co.~~
~~Stone Energy Corp.~~
~~Swift Energy Co.~~
~~Vantage Drilling Co.~~
~~Venoco, Inc.~~
~~W&T Offshore Inc.~~
~~Whiting Petroleum Corp.~~
~~Companies Surveyed using Equilar, Inc.~~
~~Pipeline and Energy Services Segment – President & Chief Executive Officer~~
~~Competitive Analysis to Determine Base Salary, Target Annual Cash Compensation,~~
~~and Target Total Direct Compensation~~
~~Atlas Pipeline Partners, L.P.~~
~~Basic Energy Services, Inc.~~
~~Cal Dive International, Inc.~~
~~Chesapeake Utilities Corporation~~
~~Copano Energy, L.L.C.~~
~~Core Laboratories Inc.~~
~~Delta Natural Gas Company, Inc.~~
~~Dune Energy, Inc.~~
~~Global Industries, Ltd.~~
~~National Fuel Gas Co.~~
~~Natural Gas Services Group, Inc.~~
~~Northwest Natural Gas Co.~~
~~Questar Corp.~~
~~RGC Resources, Inc.~~
~~South Jersey Industries, Inc.~~
~~Southern Union Co.~~
~~Western Gas Partners, LP~~

~~B-2~~
~~MDU Resources Group, Inc.~~ ~~Proxy Statement~~

~~(This page has been left blank intentionally.)~~
~~(This page has been left blank intentionally.)~~

MDU RESOURCES GROUP, INC.

ANNUAL MEETING OF STOCKHOLDERS

Tuesday, April ~~23, 2013~~22, 2014
11:00 a.m. Central Daylight Saving Time

909 Airport Road
Bismarck, ND

1200 West Century Avenue
Mailing Address:
P.O. Box 5650
Bismarck, ND 58506-5650
(701) 530-1000
proxy

This proxy is solicited on behalf of the Board of Directors for the
Annual Meeting of Stockholders on April ~~23, 2013.~~22, 2014.

This proxy will also be used to provide voting instructions to New York Life Trust Company, as Trustee of the MDU Resources Group, Inc. 401(k) Retirement Plan, for any shares of Company common stock held in the plan.

The undersigned hereby appoints Harry J. Pearce and Paul K. Sandness and each of them, proxies, with full power of substitution, to vote all Common Stock of the undersigned at the Annual Meeting of Stockholders to be held at 11:00 a.m., Central Daylight Saving Time, April ~~23, 2013,~~22, 2014, at 909 Airport Road, Bismarck, ND, and at any adjournment(s) thereof, upon all subjects that may properly come before the meeting, including the matters described in the Proxy Statement furnished herewith, subject to any directions indicated on the reverse side.Your vote is important! Ensure that your shares are represented at the meeting. Either (1) submit your proxy by touch-tone telephone, (2) submit your proxy by Internet, or (3) mark, date, sign, and return this proxy card in the envelope provided (no postage is necessary if mailed in the United States).If no directions are given, the proxies will vote in accordance with the Directors’ recommendation on all matters listed on this proxy, and at their discretion on any other matters that may properly come before the meeting.

See reverse for voting instructions.
   Shareowner Services
P.O. Box 64945
St. Paul, MN 55164-0945

~~COMPANY #~~

Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week

Your telephone or Internet vote authorizes the named
proxies to vote your shares in the same manner as if
you marked, signed, and returned your proxy card.

: INTERNET – ~~www.eproxy.com/~~www.proxypush.com/mdu
Use the Internet to vote your proxy until ~~12:00~~11:59 p.m. (CDT) on Monday, April ~~22, 2013.~~21, 2014.

( TELEPHONE – ~~1-800-560-1965~~1-866-883-3382
Use a touch-tone telephone to vote your proxy until ~~12:00~~11:59 p.m. (CDT) on Monday, April ~~22, 2013.~~21, 2014.

* MAIL – Mark, sign, and date your proxy card and return it in the postage-paid envelope provided, or return it to MDU Resources Group, Inc., c/o Shareowner Services, P.O. Box 64873, St. Paul, MN 55164-0873.

If you vote by Telephone or Internet, please do not mail your Proxy Card.

Please detach here

The Board of Directors Recommends a Vote “FOR” all nominees and “FOR” Items 2 and 3.
1. Election of Directors: Election of Directors:
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN

01. Thomas Everist o o 06. Thomas C. Knudson o o Thomas Everist o o 07. William E. McCracken o o

02. Karen B. Fagg o o 07. Patricia L. Moss o o Karen B. Fagg o o 08. Patricia L. Moss o o

03. David L. Goodin o o 08. Harry J. Pearce o o David L. Goodin o o 09. Harry J. Pearce o o

04. A. Bart Holaday o o 09. J. Kent Wells o Mark A. Hellerstein o o 10. J. Kent Wells o o

05. Dennis W. Johnson o o 10. John K. Wilson o o A. Bart Holaday o o 11. John K. Wilson o

06. Dennis W. Johnson o o

2. Ratification of Deloitte & Touche LLP as the company’s independent ~~auditors~~registered public accounting firm for ~~2013.~~2014. o For o Against o Abstain

3. Approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers. o For o Against o Abstain

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTEDFOR ALL NOMINEES ANDFOR ITEMS 2 AND 3.
Address Change? Mark box, sign, and indicate changes below: o Date

Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.


		2012			2011		*
Audit Fees (a)		$	2,400,000		$	2,456,046
Audit-Related Fees(b)			63,110			216,410
Tax Fees(c)			23,566			0
All Other Fees(d)			0			0
Total Fees(e)		$	2,486,676		$	2,672,456
Ratio of Tax and All Other Fees to Audit and Audit-Related Fees			0.96	%		0.00	%
*	The 2011 amounts were adjusted from amounts shown in the 2012 proxy statement to reflect actual amounts.
(a)	Audit fees for 2012 and 2011 consisted of services rendered for the audit of our annual financial statements, reviews of quarterly financial statements, statutory and regulatory audits, compliance with loan covenants, reviews of financial statements for MDU Construction Services Group, Inc. and subsidiaries, agreed upon procedures associated with the annual submission of financial assurance to the North Dakota Department of Health, filing Form S-3 registration statements (2011 only), and work related to responding to a comment letter from the Securities and Exchange Commission (2011 only).
(b)	Audit-related fees for 2012 and 2011 are associated with accounting research assistance, workpaper review requested by the Idaho Public Utilities Commission (2012 only), the compliance audit for the U.S. Department of Energy (2012 only), and accounting consultation in connection with due diligence (2011 only).
(c)	Tax fees for 2012 relate to the review of permanent tax benefits associated with Medicare Part D subsidies. There were no tax fees for 2011.
(d)	There were no all other fees for 2012 and 2011.
(e)	Total fees reported above include out-of-pocket expenses related to the services provided of $332,210 for 2012 and $305,346 for 2011.


		2013			2012		*
Audit Fees (a) (e)		$	2,760,620		$	2,510,138
Audit-Related Fees (b)			33,800			63,110
Tax Fees (c) (e)			66,049			23,745
All Other Fees (d)			1,374,455			0
Total Fees (f)		$	4,234,924		$	2,596,993
Ratio of Tax and All Other Fees to Audit and Audit-Related Fees			51.55	%		0.92	%
*	The 2012 amounts were adjusted from amounts shown in the 2013 proxy statement to reflect actual amounts.
(a)	Audit fees for 2013 and 2012 consist of services rendered for the audit of our annual financial statements, reviews of quarterly financial statements, statutory and regulatory audits, compliance with loan covenants, reviews of financial statements for MDU Construction Services Group, Inc. and subsidiaries, agreed upon procedures associated with the annual submission of financial assurance to the North Dakota Department of Health, comfort letter work relating to the offering of common stock (2013 only), and work related to responding to a comment letter from the Securities and Exchange Commission (2013 only).
(b)	Audit-related fees for 2013 and 2012 are associated with accounting research assistance, technical accounting consultation regarding variable interest entities, guarantees, and financing agreements (2013 only), workpaper review requested by the Idaho Public Utilities Commission (2012 only), and the compliance audit for the U.S. Department of Energy (2012 only).
(c)	Tax fees for 2013 relate to consulting services for federal income tax pollution control associated with the Big Stone power plant. Tax fees for 2012 relate to the review of permanent tax benefits associated with Medicare Part D subsidies.
(d)	All other fees for 2013 relate to assistance in an internal investigation. There were no fees in this category for 2012.
(e)	Audit fees for 2013 include $30,000 associated with a financial statement audit, and tax fees for 2013 include $50,000 associated with tax services, in each case for Dakota Prairie Refining, LLC. These fees are paid by Dakota Prairie Refining, LLC, but are included in this table because Dakota Prairie Refining, LLC, is considered a variable interest entity with respect to MDU Resources and consolidated in its financial statements.
(f)	Total fees reported above include out-of-pocket expenses related to the services provided of $385,216 for 2013 and $353,627 for 2012.


•	we pay for performance, with over 50% of our ~~2012~~2013 total target direct compensation in the form of incentive compensation, except in the case of one officer promotion where his incentive compensation was 47% of his total target direct compensation

•	we assess the relationship between our named executive officers’ pay and performance on key financial metrics – revenue, profit, return on invested capital, and stockholder return – in comparison to our performance graph peer group

•	we review competitive compensation data for our named executive officers, to the extent available, and incorporate internal equity in the final determination of target compensation levels

•	we determine annual performance incentives based on financial criteria that are important to stockholder value, including earnings, earnings per share and return on invested capital and

•	we determine long-term performance incentives based on total stockholder return relative to our performance graph peer group.


	o•	each established local safety committee will conduct eight meetings per year

	o•	each established local safety committee must conduct four site assessments per year

	o•	report vehicle accidents and personal injuries by the end of the next business day, which will be achieved only if 85% or more of the reports are submitted by the end of the next business day

	o•	achieve the targeted vehicle accident incident rate of ~~2.25~~1.85 or less and

	o•	achieve the targeted personal injury incident rate of ~~2.0~~2.3 or less.


•	~~The exploration and production business segment component represented 75% of the target award, and payout could range from no payment if the results were below the 85% level to a 200% payout if:~~

	o	~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~

	o	~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~

•	The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.


•	~~The construction services segment component represented 37.5% of the target award, and payout could range from no payment if the results were below the 85% level to a 200% payout if:~~

	o	~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~

	o	~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~

•	~~The construction materials and contracting segment component represented 37.5% of the award, and payment could range from no payment if the results were below the 85% level to a 200% payout if:~~

	o	~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~

	o	~~the 2012 return on invested capital was at least equal to the segment’s 2012 weighted average cost of capital.~~

•	The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.


Construction Materials & Contracting’s 2013 ROIC results as a % of 2013 target (weighted 18.75%)	Corresponding payment of annual incentive target based on ROIC	Construction Materials & Contracting’s 2013 EPS results as a % of 2013 target (weighted 18.75%)	Corresponding payment of annual incentive target based on EPS	Construction Services’ 2013 earnings(1) results as a % of 2013 target (weighted 37.5%)	Corresponding payment of annual incentive target based on earnings
Less than 85%	0%	Less than 85%	0%	Less than $14.5M	0%
100%	100%	100%	100%	100%	100%
191%	200%	115%	200%	$35.8M or greater	250%


(1)	Earnings is defined as GAAP earnings reported for the construction services segment.


	2012 Incentive Plan Performance Targets						2012 Incentive Plan Results
Name	EPS Business Segment ($)		ROIC (%)		EPS MDU Resources ($)		EPS Business Segment ($)			ROIC (%)			EPS MDU Resources ($)
Pipeline and Energy Services		0.99		5.8		1.19		1.78			8.3			(.01	)
Exploration and Production		2.10		6.9		1.19		(4.81	)		(13.9	)		(.01	)
Construction Services		3.61		7.4		1.19		8.18			15.2			(.01	)
Construction Materials and Contracting		0.31		3.5		1.19		0.49			4.1			(.01	)
Electric and Natural Gas Distribution		1.16		6.2		1.19		1.08			5.8			(.01	)


	2013 Incentive Plan Performance Targets								2013 Incentive Plan Results
Name	EPS Business Segment ($)		ROIC (%)		Business Segment Earnings ($)		EPS MDU Resources ($)		EPS Business Segment ($) / (% of Target)		ROIC (%) / (% of Target)		Business Segment Earnings ($) / (% of Target)		EPS MDU Resources ($) / (% of Target)
Pipeline and Energy Services		1.16		5.4		—		1.27		0.51 / 0		3.1 / 0		—		1.49 / 200
Exploration and Production		—		—		84.0		1.27		—		—		98.4 / 200		1.49 / 200
Construction Services		—		—		20.9		—		—		—		52.2 / 250		—
Construction Materials and Contracting		0.52		4.3		—		1.27		0.77 / 200		6.1 / 146.5		—		1.49 / 200
Electric and Natural Gas Distribution		1.20		5.9		—		1.27		1.30 / 155.5		6.1 / 122.6		—		1.49 / 200


•	the electric and natural gas distribution business segments component represented 75% of the target award, and payout could range from no payment if the allocated earnings per share and return on invested capital results were below the 85% level to a 200% payout if:

	o	~~the 2012 allocated earnings per share for the segment were at or above the 115% level and~~

	o	~~the 2012 return on invested capital was at or above the 115% level.~~

•	The MDU Resources Group, Inc. earnings per share component represented 25% of the award and payout could range from no payment if the results were below the $1.19 target to a 200% payout if the results were $1.37 or higher.

	2011 Incentive Plan Performance Targets		2011 Incentive Plan Results		2012 Incentive Plan Performance Targets			2012 Incentive Plan Results
								EPS		EPS
					EPS		EPS	Business		MDU
					Business		MDU	Segment	ROIC	Resources
	EPS	ROIC	EPS	ROIC	Segment	ROIC	Resources	($) / (% of	(%) / (% of	($) / (% of
Name	($)	(%)	($)	(%)	($)	(%)	($)	Target)	Target)	Target)
Pipeline and Energy Services	1.97	7.9	1.96	7.9	0.99	5.8	1.19	1.78 / 200	8.3 / 200	(.01) / 0
Exploration and Production	1.99	7.1	2.20	7.9	2.10	6.9	1.19	(4.81) / 0	(13.9) / 0	(.01) / 0
Construction Services	2.39	6.0	4.46	9.6	3.61	7.4	1.19	8.18 / 200	15.2 / 200	(.01) / 0
Construction Materials and Contracting	0.35	3.2	0.40	3.5	0.31	3.5	1.19	0.49 / 200	4.1 / 111.8	(.01) / 0
Electric and Natural Gas Distribution	1.14	6.2	1.21	6.5	1.16	6.2	1.19	1.08 / 65.5	5.8 / 67.8	(.01) / 0


Name	2012 Base Salary (000s) ($)	2012 Annual Incentive Target (%)	2012 Annual Incentive Earned (% of Target)	2012 Annual Incentive Earned (000s) ($)	2013 Base Salary (000s) ($)		2013 Target Annual Incentive (%)		2013 Annual Incentive Earned (% of Target)		2013 Annual Incentive Earned (000s) ($)
Terry D. Hildestad	750.0	100	69.1	518.3
David L. Goodin						625.0		150.0		171.8		1,610.6
Doran N. Schwartz	300.0	50	69.1	103.7		345.0		50.0		171.8		296.4
Steven L. Bietz	360.5	65	148.5	348.0
J. Kent Wells	550.0	125	0.0	0.0		570.0		125.0		200.0		1,425.0
William E. Schneider	447.4	65	69.1	201.0
Jeffrey S. Thiede *						366.7		90.0		250.0		825.0
Paul K. Sandness						344.0		60.0		171.8		354.6


*	Mr. Thiede’s 2013 Annual Incentive Earned was established using a base salary that was prorated for 2013 as follows: one-third at an annualized rate of $330,000 and two-thirds at an annualized rate of $385,000.


	Column A Percentage of Annual Incentive Target Achieved	Column B Percentage of Average Invested Capital	Column A x Column B	Column A Percentage of Annual Incentive Target Achieved		Column B Percentage of Average Invested Capital		Column A x Column B
Construction Services Segment and Construction
Materials and Contracting Segment	133.5%	29.2%	39.0%
Construction Services Segment and Construction Materials and Contracting Segment					208.8%		28.5%		59.5%
Exploration and Production Segment	0.0%	28.1%	0.0%		200.0%		26.6%		53.2%
Pipeline and Energy Services Segment	148.5%	8.8%	13.1%		50.0%		9.8%		4.9%
Electric and Natural Gas Distribution Segments	50.0%	33.9%	17.0%		154.3%		35.1%		54.2%
Total (Payout Percentage)			69.1%						171.8%


•	incentive deferrals are a low-cost source of capital for the company and

•	incentive deferrals are unsecured obligations and, therefore, carry a higher risk to the executives.


•	Alliant Energy Corporation	•	Martin Marietta Materials, Inc.	•	~~Southwest Gas Corporation~~Sterling Construction Company
•	Atmos Energy	•	National Fuel Gas Company	•	~~Sterling Construction~~SM Energy Company
•	Berry Petroleum Company	•	Northwest Natural Gas Company	•	SMSwift Energy Company
•	Black Hills Corporation	•	Pike Electric Corporation	•	~~Swift Energy Company~~Texas Industries
•	Comstock Resources, Inc.	•	Quanta Services, Inc.	•	~~Texas Industries~~Vectren Corporation
•	EMCOR Group, Inc.	•	Questar Corporation	•	~~Vectren Corporation~~Vulcan Materials Company
•	EQT Corporation	•	SCANA Corporation	•	~~Vulcan Materials Company~~Whiting Petroleum Corporation
•	Granite Construction Incorporated	•	~~Southern Union Company~~Southwest Gas Corporation	•	~~Whiting Petroleum Corporation~~


Name	2012 Base Salary to Determine Target ($)	2012 Long-Term Incentive Target at Time of Grant (%)	2012 Long-Term Incentive Target at Time of Grant ($)	Average Closing Price of Our Stock From January 1 Through January 22 ($)	Resulting Number of Performance Shares Granted on February 16 (#)	2013 Base Salary to Determine Target ($)		2013 Target Long-Term Incentive at Time of Grant (%)		2013 Target Long-Term Incentive at Time of Grant ($)		Average Closing Price of Our Stock From January 1 Through January 22 ($)		Resulting Number of Performance Shares Granted on March 4 (#)
Terry D. Hildestad	750,000	150	1,125,000	21.54	52,228
David L. Goodin							625,000		150		937,500		21.91		42,788
Doran N. Schwartz	300,000	75	225,000	21.54	10,445		345,000		75		258,750		21.91		11,809
Steven L. Bietz	360,500	90	324,450	21.54	15,062
J. Kent Wells	550,000	200	1,100,000	21.54	51,067		570,000		200		1,140,000		21.91		52,031
William E. Schneider	447,400	90	402,660	21.54	18,693
Jeffrey S. Thiede							—		—		—		—		—
Paul K. Sandness							344,000		85		292,400		21.91		13,345


~~The Company’s~~ ~~Percentile Rank~~	~~Payout Percentage of~~ ~~February 16, 2012 Grant~~
~~90th or higher~~	~~200~~	%
~~70th~~	~~150~~	%
~~50th~~	~~100~~	%
~~40th~~	10	%
~~Less than 40th~~	0	%


•	the added difficulty of comparing the company’s diversified operations to a peer group comprised primarily of single industry firms and

•	a number of the performance graph peer group companies also grant awards based solely on time vesting.


The Company’s Percentile Rank		Payout Percentage of March 4, 2013 Grant
75th or higher		200%
50th		100%
25th		20%
Less than 25th		0%


~~TSR~~Total Stockholder Return	Reduction in Award
0% through -5%	50	%50%
-5.01% through -10%	60	%60%
-10.01% through -15%	70	%70%
-15.01% through -20%	80	%80%
-20.01% through -25%	90	%90%
-25.01% or below	~~100~~	%100%


	December 31, 2012 Annual SISP Benefits		December 31, 2013 Annual SISP Benefits
Name	Survivor ($)	Retirement ($)	Survivor ($)		Retirement ($)
Terry D. Hildestad	1,025,040	512,520
David L. Goodin				552,960		276,480
Doran N. Schwartz	175,200	87,600		233,184		116,592
Steven L. Bietz	386,640	193,320
J. Kent Wells	N/A	N/A		N/A		N/A
William E. Schneider	548,400	274,200
Jeffrey S. Thiede				N/A		N/A
Paul K. Sandness				328,080		164,040


Name	Assigned Guideline Multiple of Base Salary	Actual Holdings as a Multiple of Base Salary	Number of Years at Guideline Multiple (#)		Assigned Guideline Multiple of Base Salary		Actual Holdings as a Multiple of Base Salary		Number of Years at Guideline Multiple (#)
Terry D. Hildestad	4X	6.06	7.67
David L. Goodin						4X		2.13		1.00	(1)
Doran N. Schwartz	3X	1.75	2.87	(1)		3X		2.54		3.87	(2)
Steven L. Bietz	3X	4.09	10.33
J. Kent Wells	3X	1.07	1.67	(2)		3X		1.49		2.67	(3)
William E. Schneider	3X	4.96	11.00
Jeffrey S. Thiede						3X		0.15		(4)
Paul K. Sandness						3X		4.80		9.75


(1)	Participant must meet ownership requirement by January 1, ~~2015.~~2018.
(2)	Participant must meet ownership requirement by January 1, 2015.
(3)	Participant must meet ownership requirement by May 1, 2016.
(4)	Participant must meet ownership requirement by January 1, 2019.


Name and Principal Position (a)	Year (b)	Salary ($) (c)	Bonus ($) (d)		Stock Awards ($) (e)(1)		Option Awards ($) (f)	Non-Equity Incentive Plan Compensation ($) (g)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)(2)	All Other Compensation ($) (i)		Total ($) (j)
Terry D. Hildestad	2012	750,000	—		897,277		—	518,250		355,027	38,224	(3)	2,558,778
President and CEO	2011	750,000	—		1,084,318		—	954,750		739,760	37,499		3,566,327
	2010	750,000	—		830,137		—	762,750		480,532	37,499		2,860,918

Doran N. Schwartz	2012	300,000	—		179,445		—	103,650		100,935	34,224	(3)	718,254
Vice President and CFO	2011	273,000	—		197,341		—	173,765		147,789	33,549		825,444
	2010	252,454	—		143,881		—	127,053		71,302	33,549		628,239

Steven L. Bietz	2012	360,500	—		258,765		—	347,973		329,969	37,884	(3)	1,335,091
President and CEO	2011	360,500	—		312,704		—	229,198		545,066	37,159		1,484,627
of WBI Holdings, Inc.	2010	350,000	—		232,429		—	245,245		302,863	36,218		1,166,755

J. Kent Wells	2012	550,000	—		877,331		—	—		—	96,470	(3)	1,523,801
President and CEO of	2011	367,671	916,685	(4)	925,000	(5)	—	1,007,306	(6)	—	84,580	(7)	3,301,242
Fidelity Exploration & Production Company	2010	—	—		—		—	—		—	—		—

William E. Schneider	2012	447,400	—		321,146		—	200,950		240,068	38,224	(3)	1,247,788
Executive Vice President -	2011	447,400	—		388,086		—	436,215		412,085	37,499		1,721,285
Bakken Development	2010	447,400	—		297,122		—	37,805		306,909	37,499		1,126,735



(1)	Amounts in this column represent the aggregate grant date fair value of the performance share awards calculated in accordance with Financial Accounting Standards Board generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. This column was prepared assuming none of the awards will be forfeited. The amounts were calculated using a Monte Carlo simulation, as described in Note 13 of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

(2)	Amounts shown represent the change in the actuarial present value for years ended December 31, ~~2010,~~ 2011, 2012, and ~~2012~~2013 for the named executive officers’ accumulated benefits under the pension plan, excess SISP, and SISP, collectively referred to as the “accumulated pension change,” plus ~~above market~~above-market earnings on deferred annual incentives, if any. The amounts shown are based on accumulated pension change and ~~above market~~above-market earnings as of December 31, ~~2010,~~ 2011, 2012, and ~~2012,~~2013, as follows:


	Accumulated Pension Change			Above Market Earnings			Accumulated Pension Change							Above-Market Earnings
Name	12/31/2010 ($)	12/31/2011 ($)	12/31/2012 ($)	12/31/2010 ($)	12/31/2011 ($)	12/31/2012 ($)	12/31/2011 ($)		12/31/2012 ($)		12/31/2013 ($)			12/31/2011 ($)		12/31/2012 ($)		12/31/2013 ($)
David L. Goodin								—		—		532,986			—		—		5
Terry D. Hildestad	462,186	728,587	331,845	18,346	11,173	23,182		728,587		331,845		(582,178	)		11,173		23,182		17,928
Doran N. Schwartz	71,302	147,789	100,935	—	—	—		147,789		100,935		28,459			—		—		—
Steven L. Bietz	302,863	545,066	329,969	—	—	—
J. Kent Wells	—	—	—	—	—	—		—		—		—			—		—		—
William E. Schneider	277,507	393,768	201,944	29,402	18,317	38,124
Jeffrey S. Thiede								—		—		—			—		—		—
Paul K. Sandness								—		—		(170,904	)		—		—		—


	401(k) ($)(a)	Life Insurance Premium ($)	Matching Charitable Contribution ($)	Automobile Allowance ($)	Additional LTD Premium ($)	Nonqualified Defined Contribution Plan ($)	Total ($)
David L. Goodin	36,975	242	300	—	—	—	37,517
Terry D. Hildestad	11,752	13	1,800	—	—	—	13,565
Doran N. Schwartz	34,425	156	300	—	—	—	34,881
J. Kent Wells	20,400	156	—	—	—	—	20,556
Jeffrey S. Thiede	20,400	156	—	12,000	726	33,000	66,282
Paul K. Sandness	36,975	156	2,000	—	—	—	39,131


	(a)	Represents company contributions to 401(k) plan, which include matching contributions and contributions made in lieu of pension plan accruals after pension plans were frozen at December 31, 2009.