MDU RESOURCES GROUP INC
JOHN HARP EMPLOYMENT LETTER
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<TYPE>EX-10.AH
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<FILENAME>harpempletter.htm
<DESCRIPTION>JOHN HARP EMPLOYMENT LETTER
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      John Harp Employment Letter
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">July
      20,
      2005</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><em>Confidential</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">John
      G.
      Harp</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">288
      Juniper Springs</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Henderson,
      NV 89052</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dear
      John:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">It
      is my
      pleasure to confirm, subject to approval by the Board of Directors of MDU
      Resources Group, Inc. at its meeting scheduled for August 11, 2005, the terms
      of
      your employment as President and Chief Executive Officer of Utility Services,
      Inc. (USI). This is a regular, full-time position terminable at will by either
      party that includes the following elements:</font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Initial
              Base Salary:</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
              $250,000 annualized, paid bi-weekly.</font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Executive
              Incentive</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">:
              Participation in the USI Executive Incentive Plan (EICP) with an annual
              incentive target of 50 percent of base salary and a long-term incentive
              target of 75 percent of base salary; eligibility is effective with
              your
              start date and prorated for 2004.</font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Extra
              Incentive:</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
              If
              during your employment USI achieves a net annual income of
              $12.5&#160;million in 2007 or sooner, you will be eligible for an extra
              one-time cash bonus of $250,000. If during your employment USI achieves
              a
              net annual income of $18.6&#160;million in 2008 or sooner, you will be
              eligible for an extra one-time cash bonus of $500,000. This latter
              one-time bonus will be in addition to the $250,000 extra one-time bonus
              that may be earned in 2007 or sooner.</font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Vacation:</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
              Four weeks each calendar year.</font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Benefits:</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
              Eligible to participate in USI benefit plans, including pension, 401(k),
              medical, dental, life insurance, sick leave, long-term disability and
              flexible spending accounts. You will also be eligible for inclusion
              in the
              Company&#8217;s Supplemental Income Security Plan (SISP) at Level 62.
              </font></div>
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            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Change
              of Control:</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
              You will be provided a Change of Control Employment Agreement in a
              form
              currently available to other key officers of MDU Resources Group, Inc.
              and
              its business units. This Agreement provides&#160;a three-year employment
              agreement in the event of a change of control of MDU Resources during
              which employment term you would receive a base salary&#160;not less than
              your&#160;highest salary within the last 12 months and a bonus not less
              than the highest bonus received during the last three years.&#160; You
              would also receive a comparable termination package in the event&#160;your
              employment is terminated during that term.&#160; See page 24 of the 2005
              Proxy Statement for a more detailed description of the
              Agreement.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
      your
      new role, you will be reporting to Terry and me. This employment position is
      available to you with the understanding that you will devote your full business
      time, energy, and ability exclusively to the business interests of USI, and
      you
      are free from any contractual obligations that would impede your ability to
      perform your duties for USI.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company regards the contents of this letter, including your salary, as
      confidential. If you need to discuss the details of this letter, please do
      so
      only with me.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">If
      these
      employment terms are acceptable, please sign and date below and return this
      letter to me.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">John,
      I
      am pleased you have joined our Company. You have already proven to be a valuable
      addition to the USI team and we feel confident our Company can provide you
      with
      the kind of challenges and growth opportunities you are seeking.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sincerely,</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/
      MARTIN A. WHITE</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Martin
      A.
      White</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 182pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;I
      Agree to
      the terms of </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Employment
      as described above:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/
      JOHN
      G. HARP</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">John
      G.
      Harp</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font id="TAB1" style="MARGIN-LEFT: 42pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Date:
      </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>7/20/05</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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