MDU RESOURCES GROUP, INC.1997 EXECUTIVE LONG-TERM INCENTIVE PLAN PERFORMANCE SHARE AWARD AGREEMENT

Exhibit 10.2

MDU RESOURCES GROUP, INC.

1997 EXECUTIVE LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

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In accordance with the terms of the MDU Resources Group, Inc. 1997 Executive Long-Term Incentive Plan (the “Plan”), pursuant to action of the Compensation Committee of the Board of Directors of MDU Resources Group, Inc. (the “Committee”), MDU Resources Group, Inc. (the “Company”) hereby grants to you (the “Participant”) Performance Shares (the “Award”), subject to the terms and conditions set forth in this Award Agreement (including Annexes A and B hereto and all documents incorporated herein by reference), as set forth below:

THESE PERFORMANCE SHARES ARE SUBJECT TO FORFEITURE AS PROVIDED HEREIN. THIS AWARD AND AMOUNTS RECEIVED IN CONNECTION WITH THIS AWARD ARE ALSO SUBJECT TO FORFEITURE, RECAPTURE OR OTHER ACTION IN THE EVENT OF AN ACCOUNTING RESTATEMENT, AS PROVIDED IN ARTICLE 19 OF THE PLAN. ADDITIONALLY, BY SIGNING THIS AWARD AGREEMENT YOU ARE ACKNOWLEDGING AND AGREEING THAT ANY PERFORMANCE SHARE AWARD GRANTED TO YOU IN 2005 AND ANY AMOUNTS PAID OR PAYABLE OR DISTRIBUTED OR DISTRIBUTABLE PURSUANT TO ANY SUCH PRIOR 2005 AWARD SHALL ALSO BE SUBJECT TO FORFEITURE, RECAPTURE OR OTHER ACTION IN THE EVENT OF AN ACCOUNTING RESTATEMENT, AS PROVIDED IN ARTICLE 19 OF THE PLAN.

Further terms and conditions of the Award are set forth in Annexes A and B hereto, which are integral parts of this Award Agreement.

All terms, provisions and conditions applicable to the Award set forth in the Plan and not set forth in this Award Agreement are hereby incorporated herein by reference. To the extent any provision hereof is inconsistent with a provision of the Plan; the provisions of the Plan will

govern. The Participant hereby acknowledges receipt of a copy of this Award Agreement, including Annexes A and B hereto, and a copy of the Plan and agrees to be bound by all the terms and provisions hereof and thereof.

ANNEX A

TO

MDU RESOURCES GROUP, INC.

1997 EXECUTIVE LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

It is understood and agreed that the Award of Performance Shares evidenced by the Award Agreement to which this is annexed is subject to the following additional terms and conditions.

1.  Nature of Award . The Target Award represents the opportunity to receive shares of Company common stock, $1.00 par value ("Shares") and Dividend Equivalents on such Shares. The number of Shares that may be earned under this Award shall be determined pursuant to Section 2 hereof. The amount of Dividend Equivalents that may be earned under this Award shall be determined pursuant to Section 4 hereof. Except for Dividend Equivalents, which are paid in cash, Awards will be paid in Shares.

2.  Determination of Number of Shares Earned .

The number of Shares earned, if any, for the Performance Period shall be determined in accordance with the following formula:

# of Shares = Payout Percentage X Target Award

The “Payout Percentage” is based on the Company's total shareholder return ("TSR") relative to that of the Peer Group listed on Annex B (the “Percentile Rank”) for the Performance Period, determined in accordance with the following table:

If the Company achieves a Percentile Ranking between the 40th and 50th percentiles, the Payout Percentage shall be equal to 10%, plus 9% for each Percentile Rank whole percentage above the 40th percentile. If the Company achieves a Percentile Ranking between the 50th and 100th percentiles, the Payout Percentage shall be equal to 100%, plus 2% for each Percentile Rank whole percentage above the 50th percentile.

The Percentile Rank of a given company's TSR is defined as the percentage of the Peer Group companies' returns falling at or below the given company's TSR. The formula for calculating the Percentile Rank follows:

Percentile Rank = (n - r + 1)/n x 100

Where:

To illustrate, i