1)	Title of each class of securities to which transaction applies:

2)	Aggregate number of securities to which transaction applies:

3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

4)	Proposed maximum aggregate value of transaction:

5)	Total fee paid:

¨	Fee paid previously with preliminary materials

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)	Amount Previously Paid:

2)	Form, Schedule or Registration Statement No.:

3)	Filing Party:

4)	Date Filed:

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(1)	Election of directors;

(2)	Advisory vote to approve the frequency of the vote to approve the compensation paid to the company’s named executive officers;

(3)	Advisory vote to approve the compensation paid to the company’s named executive officers;

(4)	Ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2017;

(5)	Advisory vote to approve an amendment to the company’s bylaws to adopt an exclusive forum for internal corporate claims; and

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

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•	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.

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•

Charitable contributions by the MDU Resources Foundation (Foundation) to the following 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, Billings Catholic Schools Foundation, Community Resources Inc., the University of North Dakota Foundation, and the University of Jamestown and its foundation. None of the contributions made to any of these nonprofit entities during the last three fiscal years exceeded in any single year the greater of $1 million or 2% of the relevant entity’s consolidated gross revenues.

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•	board organization, membership, and function;

•	committee structure and membership;

•	succession planning for our executive management and directors; and

•	our corporate governance guidelines.

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

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

•	success in the individual’s chosen field of endeavor;

•	skill in the areas of accounting and financial management, banking, business management, human resources, marketing, operations, public affairs, law, technology, risk management, governance, and operations abroad;

•	background in publicly traded companies including service on other public company boards of directors;

•	geographic area of residence;

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

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

•	compliance with applicable law and 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 of the company.

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•	assists the board’s oversight of

◦	the integrity of our financial statements and system of internal controls;

◦	the company’s compliance with legal and regulatory requirements;

◦	the independent registered public accounting firm’s qualifications and independence;

◦	the performance of our internal audit function and independent registered public accounting firm; and

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

•	arranges for the preparation of and approves the report that Securities and Exchange Commission rules require we include in our annual proxy statement. See the section entitled “Audit Committee Report” for further information.

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•	Business management and governance practices:

◦	risk management is a specific performance competency included 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 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.

•	Executive compensation practices:

◦	active compensation committee review of executive compensation, including comparison of executive compensation to total stockholder return ratio to the ratio for the company’s peer group;

◦	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 and 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 (maximum of 250% of target) and long-term incentive stock grant awards (200% target);

◦	clawback availability on incentive payments in the event of a financial restatement;

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

◦	use of performance shares with a relative total stockholder return performance measure and mandatory reduction in award if total stockholder return over the performance period is negative;

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

◦	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;

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◦	regular review of the appropriateness of the companies in the peer group;

◦	stock ownership requirements for the board and for executives receiving long-term incentive awards under the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan;

◦	mandatory holding periods for 50% of any net after-tax shares earned under long-term incentive awards; and

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

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•	in which we are or will be a participant;

•	the amount involved exceeds $120,000; and

•	a related person has or will have a direct or indirect material interest.

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1

The annual retainer of $110,000 in company common stock is awarded pursuant to the MDU Resources Group, Inc. Non-Employee Director Stock Compensation Plan. The amount shown for each director represents the aggregate grant date fair value of 3,886 shares of MDU Resources Group, Inc. common stock measured in accordance with Financial Accounting Standards Board (FASB) 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 of November 21, 2016, which was $28.30 per share. The $10.66 in cash paid to each director in lieu of fractional shares is included in the amount reported in the stock awards column to this table. As of December 31, 2016, there are no outstanding stock awards or options associated with the Non-Employee Director Stock Compensation Plan.

2	Group life insurance premium.

3	Mr. Wilson elected to receive shares of our common stock in lieu of his cash retainer pursuant to the Non-Employee Director Stock Compensation Plan.  The amount shown includes 2,244 shares of our common stock purchased on December 7, 2016, at $28.96 per share.

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•	we pay for performance, with over 60% of our 2016 total target direct compensation for our named executive officers in the form of performance-based incentive compensation;

•	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 align executive compensation and performance by using annual performance incentives based on criteria that are important to stockholder value, including earnings, earnings per share, and return on invested capital; and

•	we align executive compensation and performance by using long-term performance incentives based on total stockholder return relative to our peer group.

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•	Base salary for 2016;

•	Annual incentive earned for 2016;

•	Performance shares (long-term incentive) plus dividend equivalents vesting as of December 31, 2016 and paid in 2017; and

•	Other compensation which includes company contributions to the 401(k) plan and company paid life insurance premiums.

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•	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 for growth in enterprise value over the long-term;

•	provide a competitive compensation package relative to industry-specific and general industry comparisons and internal equity;

•	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

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

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•	our named executive officers are in positions to drive, and therefore bear high levels of responsibility for our corporate performance;

•	incentive compensation is dependent upon our performance;

•	incentive compensation helps ensure focus on performance measures that are aligned with our overall strategy; and

•	the interests of the named executive officers are aligned with those of stockholders by making a significant portion of their target compensation contingent upon results beneficial to stockholders.

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1

The compensation committee determined the economic conditions that led to the sale of Dakota Prairie Refining, LLC in June 2016, as well as the sale itself, were unforeseen changes and significant factors beyond the control of management that substantially affected the ability of the refining segment to achieve the specified annual production performance measure at Dakota Prairie Refining, LLC. Due to these unforeseen circumstances, the compensation committee determined the annual production performance measure at the refining segment was achieved for Mr. Fritz at the same percentage as the annual production rate at Dakota Prairie Refining, LLC was being achieved during 2016 prior to the sale.

1

For purposes of calculating the incentive award opportunities for Messrs. Goodin and Schwartz, the award opportunity payout associated with the earnings performance measure for the construction materials & contracting segment was limited to 200%, which resulted in a weighted construction materials & contracting segment award opportunity payout percentage of 187.8% versus the 194.4% for the business segment.

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1	Closing share price at February 16, 2017 was $26.37.

2	Mr. Fritz joined the company in 2015, therefore was not eligible for award for the 2014-2016 performance period.

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1	Amounts shown represent the incentive compensation determined by the compensation committee for the optimum refining production performance measure for 2016 due to the unforeseen economic conditions which lead to the sale of Dakota Prairie Refining, LLC. See “Annual Incentives” in the section entitled “Compensation Discussion and Analysis” for further information.

2

Amounts in this column represent the aggregate grant date fair value of performance share award opportunities at target calculated in accordance with Financial Accounting Standards Board (FASB) generally accepted accounting principles for stock-based compensation in FASB Accounting Standards Codification Topic 718. This column was prepared assuming none of the awards were or will be forfeited. The amounts were calculated using the Monte Carlo simulation, as described in Note 10 of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016. For 2016, the total aggregate grant date fair value of performance share award opportunities assuming the highest level of payout would be as follows:

3	Amounts shown for 2016 represent the change in the actuarial present value for the named executive officers’ accumulated benefits under the pension plan, SISP, and Excess SISP, collectively referred to as the “accumulated pension change,” plus above-market earnings on deferred annual incentives as of December 31, 2016.

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1	Annual incentive for 2016 granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan.

2	Performance shares for the 2016-2018 performance period granted pursuant to the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan.

3	Annual incentive for 2016 granted pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan.

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•	a 3.54% discount rate for the Basic SISP and Excess SISP;

•	a 3.80% discount rate for the pension plan;

•	the Society of Actuaries RP-2014 Adjusted to 2006 Total Dataset Mortality with Scale MP-2016 for post-retirement mortality; and

•	no recognition of future salary increases or pre-retirement mortality.

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•	0% vesting for less than three years of participation;

•	20% vesting for three years of participation;

•	40% vesting for four years of participation; and

•	an additional 10% vesting for each additional year of participation up to 100% vesting for ten years of participation.

•	monthly retirement benefits only;

•	monthly death benefits paid to a beneficiary only; or

•	a combination of retirement and death benefits, where each benefit is reduced proportionately.

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•	an acquisition during an 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 gross fair market value of all of our assets.

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

•	a majority of our board of directors whose election or nomination was not approved by a majority of the incumbent 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.

•	termination of employment during the first year of the performance period = shares are forfeited;

•	termination of employment during the second year of the performance period = performance shares earned are prorated based on the number of months employed during the performance period; and

•	termination of employment during the third year of the performance period = full amount of any performance shares earned are received.

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•	Deloitte & Touche LLP’s capabilities considering the complexity of our business and the resulting demands placed on Deloitte & Touche LLP in terms of technical expertise and knowledge of our industry and business;

•	the quality and candor of Deloitte & Touche LLP’s communications with the audit committee and management;

•	Deloitte & Touche LLP’s independence;

•	the quality and efficiency of the services provided by Deloitte & Touche LLP, including input from management on Deloitte & Touche LLP’s performance and how effectively Deloitte & Touche LLP demonstrated its independent judgment, objectivity, and professional skepticism;

•	external data on audit quality and performance, including recent Public Company Accounting Oversight Board reports on Deloitte & Touche LLP and its peer firms; and

•	the appropriateness of Deloitte & Touche LLP’s fees, tenure as our independent auditor, including the benefits of a longer tenure, and the controls and processes in place that help ensure Deloitte & Touche LLP’s continued independence.

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a	Audit fees for 2016 and 2015 consisted of fees for services rendered for the audit of our annual financial statements, reviews of quarterly financial statements, subsidiary, statutory and regulatory audits, filing a Form S-8 Registration Statement (2016), and discontinued operations for Dakota Prairie Refining, LLC (DPR) (2016).

b	Audit-related fees for 2016 and 2015 are associated with accounting research assistance, Intermountain Gas Company public utility review (2016), agreed upon procedures associated report for Knife River Corporation’s JTL Group, Inc. (Wyoming) (2015), and due diligence work associated with a potential acquisition (2015).

c	Tax fees for 2015 include the preparation of federal and state tax returns for DPR. The fees associated with DPR were paid by DPR, but are included in this table because DPR was considered a variable interest entity with respect to MDU Resources Group, Inc. and is consolidated in its financial statements.

d

All other fees for 2016 are associated with a pollution control project at Big Stone electric generating facility. All other fees for 2015 are associated with a cost segregation study and research on R&D credits, in each case for DPR. The fees associated with DPR were paid by DPR, but are included in this table because DPR was considered a variable interest entity with respect to MDU Resources Group, Inc. and consolidated in its financial statements.

e	Total fees reported above include out-of-pocket expenses related to the services provided of $350,000 for 2016 and $382,965 for 2015.

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