DEF 14A of Knife River Corp, Mar 29, 2024

DEF 14A of Knife River Corp

Filed Mar 29, 2024 · FY20230001955520-24-000016

Open on EDGAR

  1. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    Bismarck, North Dakota, 58506-5568 (701) 530-1400

  2. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD May 14, 2024 |

  3. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    March 29, 2024 NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the annual meeting) of Knife River Corporation (the company) will be held on Tuesday, May 14, 2024, at 10:00 a.m., Central Daylight Saving Time. The annual meeting will be held entirely online live via audio webcast. You will be able to attend and participate in the annual meeting online by visiting www.virtualshareholdermeeting.com/KNF2024, where you will be able to listen to the annual meeting live, submit questions, and vote. After carefully considering the format of the annual meeting, the board of directors (the board) concluded to hold the annual meeting exclusively online live via audio webcast. The board believes the virtual annual meeting offers the same participation opportunities as an in-person annual meeting. In addition, the board believes the virtual annual meeting format allows the company to provide consistent opportunities for engagement to all stockholders, regardless of their geographic location. Therefore, the company plans to hold the annual meeting by means of remote communications only. The annual meeting will be held for the following purposes:

  4. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Items of Business | 1. | Election of two Class I directors; | | | 2. | Advisory vote to approve the frequency of future advisory votes 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 2024; and | | | 5. | Transaction of any other business that may properly come before the annual meeting or any adjournment(s) thereof. | | Record Date | The board has set the close of business on March 15, 2024, as the record date for the determination of stockholders who will be entitled to notice of, and to vote at, the annual meeting and any adjournment(s) thereof. | | | Meeting Attendance | All stockholders, as of the record date of March 15, 2024, are cordially invited to attend the annual meeting. Whether or not you plan to attend the annual meeting online, please vote your shares as instructed in the Notice of Availability of Proxy Materials (Notice), over the Internet, or by telephone after your receipt of hard copies of the proxy materials, as promptly as possible. You may also request a paper Proxy Card, which will include a postage-paid envelope, to submit your vote by mail, as described in the Notice. You may also vote your shares online and submit your questions during the annual meeting. Instructions on how to vote while participating at the annual meeting live via the Internet are posted at www.virtualshareholdermeeting.com/KNF2024 and can be found in the Proxy Statement in the section entitled “Information About the Annual Meeting - How to Attend and Vote at the Annual Meeting.” Stockholders of record who attend the annual meeting online may withdraw their proxy and vote online at the annual meeting if they so desire. | | | Proxy Materials | This Proxy Statement will first be sent to stockholders requesting written materials on or about March 29, 2024. The Notice will also be sent to certain stockholders on or about March 29, 2024. The Notice contains basic information about the annual meeting and instructions on how to view the company’s proxy materials and vote online. | |

  5. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    The list of stockholders entitled to vote at the annual meeting will be available for examination 10 days prior to the annual meeting at the company’s principal executive office, 1150 West Century Avenue, P.O. Box 5568, Bismarck, North Dakota, 58506-5568.

  6. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | By order of the Board of Directors, | | | | Karl A. Liepitz | | Secretary |

  7. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 14, 2024. The 2024 Notice of Annual Meeting and Proxy Statement and 2023 Annual Report to Stockholders are available at www.knfproxy.com. |

  8. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | TABLE OF CONTENTS | | | | | | | PROXY STATEMENT SUMMARY | | EXECUTIVE COMPENSATION (continued) | | | | Annual Meeting Information | 1 | Compensation Governance | 77 | | | Company Overview | 3 | Compensation Committee Report | 79 | | | Business Performance Highlights | 3 | Compensation Policies and Practices as They Relate | | | | Corporate Governance Practices | 5 | to Risk Management | 80 | | | Compensation Highlights | 6 | Executive Compensation Tables | 81 | | | Sustainability Highlights | 8 | Summary Compensation Table | 81 | | | BOARD OF DIRECTORS | | Grants of Plan-Based Awards | 83 | | | Item 1. Election of Directors | 15 | Outstanding Equity Awards at Fiscal Year-End | 86 | | | Director Nominees | 17 | Option Exercises and Stock Vested | 87 | | | Board Evaluations and Process for Selecting Directors | 23 | Pension Benefits | 87 | | | Board Skills and Diversity Matrix | 24 | Nonqualified Deferred Compensation | 89 | | | CORPORATE GOVERNANCE | | Potential Payments upon Termination or | | | | Director Independence | 27 | Change of Control | 91 | | | Oversight of Sustainability | 27 | Pay Versus Performance | 95 | | | Stockholder Engagement | 29 | AUDIT MATTERS | | | | Stockholder Communications with the Board | 30 | Item 4. Ratification of the Appointment of | | | | Board Leadership Structure | 30 | Deloitte & Touche LLP as the Company’s Independent | | | | Board’s Role in Risk Oversight | 30 | Registered Public Accounting Firm for 2024 | 99 | | | Board Meetings and Committees | 32 | Annual Evaluation and Selection of Deloitte & | | | | Additional Governance Features | 35 | Touche LLP | 99 | | | Corporate Governance Materials | 38 | Audit Fees and Non-Audit Fees | 100 | | | Related Person Transaction Disclosure | 38 | Policy on Audit Committee Pre-Approval of Audit | | | | COMPENSATION OF NON-EMPLOYEE DIRECTORS | | and Permissible Non-Audit Services | 100 | | | Director Compensation | 44 | Audit Committee Report | 101 | | | SECURITY OWNERSHIP | | INFORMATION ABOUT THE ANNUAL MEETING | | | | Security Ownership Table | 46 | Who Can Vote | 102 | | | Hedging Policy | 46 | Notice and Access | 102 | | | Greater than 5% Beneficial Owners | 47 | How to Vote | 102 | | | EXECUTIVE COMPENSATION | | How to Attend and Vote at the Annual Meeting | 103 | | | Item 2. Advisory Vote to Approve the Frequency of Future | | Technical Difficulties | 104 | | | Advisory Votes to Approve the Compensation Paid to | | Revoking Your Proxy or Changing Your Vote | 104 | | | the Company’s Named Executive Officers | 48 | Discretionary Voting Authority | 104 | | | Item 3. Advisory Vote to Approve the Compensation Paid | | Voting Standards | 105 | | | to the Company’s Named Executive Officers | 49 | Proxy Solicitation | 106 | | | Information Concerning Executive Officers | 50 | Householding of Proxy Materials | 106 | | | Compensation Discussion and Analysis | 51 | Knife River Corporation 401(k) Plan | 106 | | | Special Note Regarding the Separation | 51 | Why Hold a Virtual Annual Meeting | 106 | | | Executive Summary | 52 | Tabulation of Votes | 106 | | | 2023 Compensation Framework | 57 | Annual Meeting Results | 106 | | | 2023 Compensation for Our Named | | Stockholder Proposals, Director Nominations, and | | | | Executive Officers | 62 | Other Items of Business for 2025 Annual Meeting | 107 | | | Other Benefits | 76 | APPENDIX | 110 |

  9. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    Cautionary information and forward-looking statements. This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are all statements other than statements of historical fact, including without limitation those statements that are identified by the words "anticipates," "estimates," "expects," "intends," "plans," "predicts" and similar expressions, and include statements concerning plans, trends, objectives, goals, strategies, future events, or performance, and underlying assumptions (many of which are based, in turn, upon further assumptions) and other statements that are other than statements of historical facts. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. Forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those indicated (both favorably and unfavorably). These risks and uncertainties include, but are not limited to, those described in Part I—Item 1A “Risk Factors” in our 2023 Annual Report on Form 10-K (2023 Form 10-K) and subsequent Securities and Exchange Commission (SEC) filings. Caution should be taken not to place undue reliance on any such forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document. To assist you in reviewing the 2023 performance of Knife River Corporation (the company, Knife River, we, us or our, formerly known as Knife River Holding Company) and voting your shares, we call your attention to key elements of our 2024 Proxy Statement. The following is only a summary and does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting. For more information about these topics, please review the full Proxy Statement and our 2023 Annual Report to Stockholders. On June 1, 2023, we became a publicly traded company when our former parent company, MDU Resources Group, Inc. (MDU Resources) transferred its wholly owned subsidiary, KRC Materials, Inc. (formerly known as Knife River Corporation) to the company (the Separation) and distributed approximately 90% of the outstanding common stock of the company on May 31, 2023 (the Separation Date) to MDU Resources’ stockholders of record as of the close of business on May 22, 2023. The annual meeting is our first annual meeting following the Separation. The Separation is discussed in more detail in our 2023 Form 10-K. This Proxy Statement will first be sent to stockholders requesting written materials on or about March 29, 2024. The Notice of Availability of Proxy Materials (the Notice) will also be sent to certain stockholders on or about March 29, 2024. The Notice contains basic information about the annual meeting and instructions on how to view the company’s proxy materials and vote online.

  10. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Annual Meeting Information | Summary of Stockholder Voting Matters | | | | | Time and Date | Voting Matters | | Board Vote Recommendation | See Page | | 10:00 a.m. Central Daylight Saving Time Tuesday, May 14, 2024 | Item 1. | Election of Two Class I Directors | FOR Each Nominee | 15 | | | Item 2. | Advisory Vote to Approve the Frequency of Future Advisory Votes to Approve the Compensation Paid to the Company’s Named Executive Officers | FOR One Year | 48 | | Place | Item 3. | Advisory Vote to Approve the Compensation Paid to the Company’s Named Executive Officers | FOR | 49 | | www.virtualshareholdermeeting.com/KNF2024 | | | | | | | Item 4. | Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2024 | FOR | 99 |

  11. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Who Can Vote | | | | If you held shares of Knife River common stock at the close of business on March 15, 2024, you are entitled to vote at the annual meeting. You are encouraged to vote in advance of the annual meeting using one of the following voting methods. To attend and participate in the annual meeting, you will need the 16-digit control number included in your Notice or your Proxy Card, or on the instructions that accompanied your proxy materials. If your shares are held in “street name,” you should contact your bank, broker, or other holder of record to obtain your 16-digit control number or otherwise vote through the bank, broker, or other holder of record. Only stockholders with a valid 16-digit control number, will be able to attend the annual meeting, ask questions, and vote. The annual meeting webcast will begin promptly at 10:00 a.m. Central Daylight Saving Time. We encourage you to access the annual meeting prior to the start time. Online check-in will begin at 9:45 a.m. Central Daylight Saving Time, and you should allow ample time for the check-in procedures. | | | | How to Vote | | | | Registered Stockholders | | | | If your shares are held directly with our stock registrar, you can vote any one of four ways: | | | | | By Internet: | Go to the website shown on the Notice or Proxy Card, if you received one, and follow the instructions. | | | By Telephone: | Call the telephone number shown on the Notice or Proxy Card, if you received one, and follow the instructions given by the voice prompts. Voting via the Internet or by telephone authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated, and returned the Proxy Card by mail. Your voting instructions may be transmitted up until 11:59 p.m. Eastern Time on May 13, 2024. | | | By Mail: | If you received a paper copy of the Proxy Statement, Annual Report, and Proxy Card, mark, sign, date, and return the Proxy Card in the postage-paid envelope provided. | | | During the Meeting: | Attend the annual meeting online and follow the instructions posted at www.virtualshareholdermeeting.com/KNF2024. Even if you plan to attend the annual meeting online, we recommend that you also vote either by Internet, by telephone, or by mail so that your vote will be counted if you later decide not to attend. | | Beneficial Stockholders | | | | If you held shares beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding shares “in street name”) and do not have a control number, you will receive voting instructions from said bank, broker, or other holder of record. If you do not have a control number, you will be able to attend the annual meeting as a “guest” and listen to the proceedings, but you will not be able to vote, ask questions, or otherwise participate. Even if you plan to attend the annual meeting online, we recommend that you also vote either by Internet, by telephone, or by mail so that your vote will be counted if you later decide not to attend. | | |

  12. Bismarck, North Dakota, 58506-5568 (701) 530-1400

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  13. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | ■ | Company Overview |

  14. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    Knife River is an aggregates-led construction materials and contracting services provider in the U.S. The company’s 1.1 billion tons of aggregate reserves provide the foundation for a vertically integrated business strategy, with approximately 37% of our aggregates being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (heavy-civil construction, asphalt paving, concrete construction, site development and grading services). The company provides construction materials and contracting services for both public and private customers. For the year ended December 31, 2023, approximately 62% of our revenue was derived from construction materials and 38% from contracting services. Knife River is strategically focused on being the provider of choice in mid-size, high-growth markets. The company is committed to continued growth and to delivering for its stakeholders - customers, communities, employees and stockholders - by executing on its four core values: People, Safety, Quality and the Environment. Through our network of 180 active aggregate sites, 102 ready-mix plants and 56 asphalt plants, Knife River supplies construction materials to customers in 14 states. Knife River also performs related contracting services. The company has broad access to high-quality aggregates in most of its markets, which forms the foundation of its vertically integrated business model. Knife River shares resources, including plants, equipment and people across its various locations to maximize efficiency, and it transports its products by truck, rail and barge to complete the vertical value chain depending on the particular market. Knife River’s strategically located aggregate sites, ready-mix plants and asphalt plants, along with its fleet of ready-mix and dump trucks, enables the company to better serve its customers. Knife River believes its integrated business model is a strong competitive advantage that provides scale, efficiency and operational excellence for the benefit of customers, stockholders and the broader communities that it serves.

  15. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | ■ | Business Performance Highlights |

  16. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Knife River has provided construction materials and contracting services since 1992, growing from its first aggregates operation in California to being the fourth-largest sand and gravel producer in the country, with locations in 14 states. On June 1, 2023, Knife River completed the Separation from its former parent company, MDU Resources, to be a standalone publicly traded company on the New York Stock Exchange (NYSE), under the ticker symbol KNF. | |

  17. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    The company’s reportable segments are: •Pacific (Alaska, California, Hawaii) •Northwest (Oregon, Washington) •Mountain (Idaho, Montana, Wyoming) •Central (Iowa, Minnesota, North Dakota, South Dakota, Texas) •Energy Services (California, Iowa, Nebraska, South Dakota, Texas, Wyoming) Knife River reported full-year 2023 consolidated revenue of $2.8 billion, a 12% increase from the prior-year period. Net income was $182.9 million, up 57% from the prior-year period. Adjusted EBITDA was $432.4 million, an increase of 38% versus the prior year period, and Adjusted EBITDA margin increased 290 basis points on a year-over-year basis to 15.3% in 2023. Adjusted EBITDA and Adjusted EBITDA margin are considered non-GAAP financial measures and are defined in the Compensation Discussion & Analysis section of this proxy statement. See “Appendix A” to this Proxy Statement for a reconciliation to the nearest Generally Accepted Accounting Principles (GAAP) financial measure. Helping to drive these results was Knife River’s Competitive EDGE strategy, the company’s plan for increasing Adjusted EBITDA margins and executing on other key initiatives aimed at continued profitable growth. “EDGE” is an acronym for EBITDA Margin Improvement, Discipline, Growth and Excellence. A key part of the Competitive EDGE plan is optimizing pricing to fully realize the value of the company’s core products – aggregates, ready-mix concrete, asphalt, and liquid asphalt – as well as contracting services. Price increases outpaced costs for the year and positively contributed to gross margins. On the contracting services side, Knife River in 2023 was disciplined on the work it chose to bid, targeting higher-margin projects. This approach contributed to a lower backlog than 2022, but work in the backlog reflected improved margins than the prior year's backlog. With Quality as a core value, the company continues to emphasize quality over quantity in its backlog, highlighting opportunities for ongoing margin improvement. Knife River’s end markets include public-sector and private-sector customers. For the year, public work accounted for approximately 77% of our contracting services revenues. The company continued to benefit from infrastructure funding in the form of federal, state and local initiatives, including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the American Rescue Plan Act, as well as dedicated state-level funding in 12 of the 14 states where Knife River operates. Knife River had success in 2023 in other areas of its EDGE strategy as well. The company grew organically with the opening of its new, state-of-the-art prestress manufacturing facility near Spokane, Washington. The Central segment also realized organic growth in 2023 with the Honey Creek Quarry in Texas becoming fully operational in the second quarter, contributing to higher volumes and lower production costs. Additionally, the Knife River Training Center had its first full year of operations in 2023. The facility’s focus on excellence extended to training over 1,100 people in multiple disciplines, utilizing the on-site classrooms and the 80,000-square-foot dome.

  18. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | (The Knife River Training Center in Oregon includes an 80,000-square-foot dome for hands-on learning.) |

  19. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | ■ | Corporate Governance Practices |

  20. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    | Knife River is committed to strong corporate governance aligned with stockholder interests. The board, through its nominating and governance committee, regularly monitors leading practices in governance and plans to continue to adopt measures that it determines are in the best interests of the company and its stockholders. The following highlights the company’s corporate governance practices and policies. See the sections entitled “Corporate Governance” and “Executive Compensation” for more information on the following: | | | | | ✓ | Structure in Place to Fully Declassify Board at the 2027 Annual Meeting | ✓ | All Directors are Independent Other Than Our CEO | | ✓ | Majority Voting for Directors in Uncontested Elections | ✓ | Executive Sessions of Independent Directors at Every Regularly Scheduled Board Meeting | | ✓ | No Shareholder Rights Plan | ✓ | Standing Committees Consist Entirely of Independent Directors | | ✓ | Succession Planning and Implementation Process | ✓ | Stock Ownership Requirements for Directors and Executive Officers | | ✓ | Separate Board Chair and CEO | ✓ | Anti-Hedging and Anti-Pledging Policies for Directors and Executive Officers | | ✓ | Active Investor Outreach Program | ✓ | No Related Party Transactions by Our Directors or Executive Officers | | ✓ | Annual Board and Committee Self-Evaluations | ✓ | Compensation Recovery/Clawback Policy | | ✓ | Risk Oversight by Full Board and Committees | ✓ | Annual Advisory Approval on Executive Compensation* | | ✓ | Environmental and Social Oversight by Full Board and Committees | ✓ | Mandatory Retirement for Directors at Age 74 | | ✓ | Proxy Access for Stockholders | ✓ | Directors May Not Serve on More Than Three Public Boards Including the Company’s Board | | ✓ | One Class of Stock | ✓ | Diverse Board in Terms of Gender, Race, Experience, Skills and Tenure | | ✓ | Comprehensive Board Refreshment Process | ✓ | Executive Officers May Not Serve on More Than One Other Public Company Board |

  21. Bismarck, North Dakota, 58506-5568 (701) 530-1400

    * Assuming the proposal regarding the advisory vote to approve the frequency of future advisory votes to approve the compensation paid to the company’s named executive officers is approved at the annual meeting.

  22. Director Nominees

    Director Nominees The board recommends a vote FOR the election of each of the following Class I director nominees. Additional information about each director’s background and experience, including those directors not up for election this year, can be found beginning on page 15.

  23. Director Nominees

    | Name | Age | Director Since | Primary Occupation | Board Committees | | German Carmona Alvarez | 55 | 2023 | Global president of digital consulting of Wood PLC | • Audit • Compensation (Chair) | | Thomas W. Hill | 67 | — | Founder and former president and CEO of Summit Materials, Inc. | • Committees to be assigned by the board pending election |

  24. Director Nominees

    | ■ | Compensation Highlights |

  25. Director Nominees

    | The company’s executive compensation is based on providing market competitive compensation opportunities to attract top talent focused on achievement of short and long-term business results. Our compensation program is structured to align compensation with the company’s financial performance as a substantial portion of our executive compensation is directly linked to performance incentive awards. | | | ■ | Over 80% of our chief executive officer’s target compensation and approximately 69% of our other named executive officers’ target compensation is at risk. | | ■ | 100% of our named executive officers’ annual incentive is performance-based and tied to performance against pre-established, specific, measurable goals. For 2023, due to the Separation, time-based restricted stock units represented 100% of our named executive officers’ long-term incentive and require the executive to remain employed with the company through the vesting period. For 2024, 100% of our named executive officers’ annual incentive and 65% of their long-term incentive are performance-based and tied to performance against pre-established, specific, measurable goals which are further described in the 2024 Annual and Long-Term Incentive Preview section of this Proxy Statement. |

  26. ITEM 1. ELECTION OF DIRECTORS

    ITEM 1. ELECTION OF DIRECTORS The board currently consists of six directors divided into three classes, as nearly equal in number as reasonably possible. Under our amended and restated bylaws (our bylaws) and amended and restated certificate of incorporation, until the annual meeting of stockholders in 2027, our board will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors. The directors designated as Class I directors have terms expiring at the annual meeting, and are up for re-election at the annual meeting for a three-year term to expire at the 2027 annual meeting of stockholders. The directors designated as Class II directors have terms expiring at the 2025 annual meeting of stockholders and will be up for re-election at that meeting for a two-year term to expire at the 2027 annual meeting of stockholders. The directors designated as Class III directors have terms expiring at the 2026 annual meeting of stockholders and will be up for re-election at that meeting for a one-year term to expire at the 2027 annual meeting of stockholders. Commencing with the 2027 annual meeting of stockholders, directors will be elected annually and for a term of office to expire at the next annual meeting of stockholders, and our board will thereafter no longer be divided into classes. The current members of the classes are divided as follows:

  27. ITEM 1. ELECTION OF DIRECTORS

    | Class I terms expire at the 2024 annual meeting: | | | German Carmona Alvarez | | | Thomas Everist(1) | | | Class II terms expire at the 2025 annual meeting: | | | Patricia L. Moss | | | William J. Sandbrook | | | Class III terms expire at the 2026 annual meeting: | | | Karen B. Fagg | | | Brian R. Gray | | | (1) | The company’s corporate governance guidelines provide that directors are not eligible to be nominated or appointed to the board if they are 74 years of age or older at the time of the election or appointment, subject to certain exceptions. In accordance with the corporate governance guidelines, Mr. Everist was not renominated to stand for re-election to the board. Mr. Everist had an over 40-year career in the construction materials and mining industry and brought deep industry expertise to the board. The board thanks him for his distinguished service on the board and wishes him all the best. Assuming Mr. Hill is elected at the annual meeting, he will replace Mr. Everist as a Class I director. |

  28. ITEM 1. ELECTION OF DIRECTORS

    The number of directors may be fixed by resolution adopted from time to time by the board. Any vacancies or newly created directorships may be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director. Each director shall hold office until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal. The board has affirmatively determined each director nominee is independent in accordance with NYSE rules, our governance guidelines, and our bylaws. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which he or she is or was to be selected as a director or officer of our company. There are no family relationships among our executive officers and directors. Our bylaws provide for a majority voting standard for the election of directors. See “Additional Information - Majority Voting” below for further detail. Each of the director nominees has consented to be named in this Proxy Statement and to serve as a director, if elected. We do not know of any reason why any nominee would be unable or unwilling to serve as a director, if elected. If a nominee becomes unable to serve or will not serve, proxies may be voted for the election of such other person nominated by the board as a substitute or the board may choose to reduce the number of directors. Information about each director nominee’s share ownership is presented under “Security Ownership.” The shares represented by the proxies received will be voted for the election of each of the two Class I director nominees named below unless you indicate in the proxy that your vote should be cast against any or each of the director nominees or that you abstain from voting. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified or until his or her earlier death, resignation, removal, retirement or disqualification. A stockholder cannot vote for more than two nominees. The two nominees for election to the board as Class I directors at the annual meeting, each proposed by the board upon recommendation of the nominating and governance committee, are listed below with brief biographies, along with brief biographies of those directors not up for election this year. The nominees’ and continuing directors’ ages are current as of December 31, 2023.

  29. ITEM 1. ELECTION OF DIRECTORS

    | The board of directors recommends that the stockholders vote “FOR” the election of each nominee. |

  30. ITEM 1. ELECTION OF DIRECTORS

    A nominee for director will be elected if the number of shares voted “FOR” such nominee’s election exceeds 50% of the number of votes cast with respect to that nominee’s election. Abstentions will have no effect on this proposal. Broker non-vote shares are not entitled to vote on this proposal and, therefore, are not counted in the vote.

  31. Director Nominees

    Director Nominees

  32. Class I Director with Term Expiring at the Annual Meeting and Class I Director Nominee

    Class I Director with Term Expiring at the Annual Meeting and Class I Director Nominee

  33. Class I Director with Term Expiring at the Annual Meeting and Class I Director Nominee

    | | | German Carmona Alvarez Age 55 | Independent Director Since 2023 Audit Committee Compensation Committee (Chair) | | | | Key Contributions to the Board: With over 30 years of global experience managing income statements and functional areas and 15 years of global experience in the building materials industry, Mr. Carmona Alvarez brings broad industry expertise to the board. Mr. Carmona Alvarez also contributes experience and expertise in human capital management, digital and information technology, finance, and mergers and acquisitions. | | | Professional Highlights | | | | | • | Global president of digital consulting of the consulting and engineering company Wood PLC, Aberdeen, United Kingdom, since January 2023 to present, and global president of applied intelligence from 2021 through December 2022. Director of Wood PLC USA, Houston, Texas, the United States affiliate of Wood PLC, since 2022. | | | | • | Senior vice-president and global digital practice leader of NEORIS, a technology and digital strategy consulting firm with presence in 27 countries focusing on the design strategy and execution of agile digital transformation programs, from March 2019 to July 2021. | | | | • | Executive vice-president finance, information technology and shared services of CEMEX Inc., a global building materials company from 2016 to 2019; senior vice president of continuous improvement and commercial strategy from 2014 to 2016; senior vice president of aggregates and mining resources from 2012 to 2014; global vice president of organization, compensation and benefits from 2009-2012; global vice president of human resources planning and development from 2006 to 2009; corporate vice president of human capital from 2004 to 2006. | | | | • | Senior principal of strategy and transformation of The Boston Consulting Group, a general management consulting firm that practices in business strategy, from 2000 to 2004. | | | | Other Experience | | | | | • | Former director of publicly traded MDU Resources, an energy delivery and construction services business, from 2022 until the Separation Date. | | | | • | Former board chair of Strata.ai, a strategy and venture building firm focused on decision science, artificial intelligence and augmented reality, from 2020 to 2022. | | | | • | Former board of trustees of ITESM/Tec Milenio, a private institution of higher education, from 2010 to 2017. | | |

  34. Class I Director with Term Expiring at the Annual Meeting and Class I Director Nominee

    | | | Thomas W. Hill Age 67 | Independent Director Nominee in 2024 | | | | Key Contributions to the Board: With over 40 years of experience in aggregate, asphalt, cement, and ready-mix, Mr. Hill will bring strong business leadership, support disciplined and strategic growth, and extensive experience in capital markets. | | | Professional Highlights | | | | | • | Founder of publicly traded Summit Materials, Inc., an integrated supplier of construction materials; president and chief executive officer, including a member of the board of directors from August 2009 to September 2020; senior advisor from September 2020 to December 31, 2020; and served as a consultant from January 1, 2021 to July 20, 2023. | | | | • | Chief executive officer of Oldcastle, Inc., an integrated supplier of construction materials and services, from July 2006 to July 2008; chief executive officer of the materials division, Oldcastle Materials, Inc., from January 2000 to July 2006; and president from 1991 to January 2000. | | | | Other Experience | | | | | • | Former director of CRH plc, an integrated supplier of aggregates, cement, asphalt, ready-mixed concrete, and paving and construction services, Dublin, Ireland, from 2002 to June 2008. | | | | • | Research and consulting services to Firstlight Management, LP, an investment fund, from June 2022 to February 2024. | | | | • | Former treasurer of the National Asphalt Pavement Association, the National Stone Association (now National Stone, Sand and Gravel Association), and the American Road and Transportation Builders Association, including chair from 2002 to 2004, all industry associations. | | | | • | Inducted to the Pit & Quarry Hall of Fame in 2024, which recognizes individuals who have made significant contributions to the aggregate industry. | | |

  35. Directors Continuing in Office

    Directors Continuing in Office

  36. Class II Directors with Terms Expiring at the 2025 Annual Meeting

    Class II Directors with Terms Expiring at the 2025 Annual Meeting

  37. Class II Directors with Terms Expiring at the 2025 Annual Meeting

    | | | Patricia L. Moss Age 70 | Independent Director Since 2023 Audit Committee (Chair) Compensation Committee | Other Current Public Boards: --First Interstate BancSystem, Inc. --Aquila Group of Funds | | | | Key Contributions to the Board: With substantial experience in the finance and banking industry, including service on the boards of public banking and investment companies, Ms. Moss contributes broad knowledge of finance, business development, human resources, and compliance oversight, as well as public company governance to the board. Through her business experience and knowledge of the Pacific Northwest, Ms. Moss also provides insight on state, local, and regional economic and political issues where a significant portion of our operations and employees are located. | | | | Professional Highlights | | | | | | • | President and chief executive officer of Cascade Bancorp, a financial holding company, Bend, Oregon, from 1998 to January 3, 2012; chief executive officer of Cascade Bancorp’s principal subsidiary, Bank of the Cascades, from 1998 to January 3, 2012, serving also as president from 1998 to 2003; and chief operating officer, chief financial officer and secretary of Cascade Bancorp from 1987 to 1998. | | | | | Other Experience | | | | | | • | Former director of publicly traded MDU Resources, an energy delivery and construction services business, from 2003 until the Separation Date. | | | | | • | Member of the Oregon Investment Council, which oversees the investment and allocation of all state of Oregon trust funds, from December 2018 to March 2021. | | | | | • | Director of First Interstate BancSystem, Inc., a financial services holding company, since May 30, 2017. | | | | | • | Director of Cascade Bancorp and Bank of the Cascades from 1993, and vice chair from January 3, 2012 until May 30, 2017, when Cascade Bancorp merged into First Interstate BancSystem, Inc., and became First Interstate Bank. | | | | | • | Chair of the Bank of the Cascades Foundation Inc. from 2014 to July 31, 2018; co-chair of the Oregon Growth Board, a state board created to improve access to capital and create private-public partnerships, from May 2012 through December 2018; and a member of the Board of Trustees for the Aquila Group of Funds, whose core business is mutual fund management and provision of investment strategies to fund shareholders, from January 2002 to May 2005 (one fund) and from June 2015 to present (currently three funds). | | | | | • | Former director of the Oregon Investment Fund Advisory Council, a state-sponsored program to encourage the growth of small businesses in Oregon; the Oregon Business Council, with a mission to mobilize business leaders to contribute to Oregon’s quality of life and economic prosperity; the North Pacific Group, Inc., a wholesale distributor of building materials, industrial, and hardwood products; and Clear Choice Health Plans Inc., a multi-state insurance company. | | | |

  38. Class II Directors with Terms Expiring at the 2025 Annual Meeting

    | | | William J. Sandbrook Age 66 | Independent Director Since 2023 Audit Committee Nominating and Governance Committee | Other Current Public Boards: --Comfort Systems USA | | | | Key Contributions to the Board: With over 30 years of experience in mining, building materials, construction industries, and public companies, Mr. Sandbrook brings critical knowledge of the construction materials and contracting industry to the board. Mr. Sandbrook also contributes strong business leadership and management capabilities and insights through his various roles as CEO. | | | | Professional Highlights | | | | | | • | President of U.S. Concrete, Inc., formerly a publicly traded construction materials supplier, from 2011 to 2019 and CEO from 2011 to 2020, including chair of its board of directors from 2018 to 2020. | | | | | • | CEO of Oldcastle Inc.’s Products and Distribution Group, an integrated supplier of construction materials and services, from June 2008 to August 2011; CEO of Oldcastle’s Architectural Products Group, responsible for Oldcastle’s U.S. and Canadian operations, as well as CRH plc’s business in South America, from 2006 to June 2008; and president of Oldcastle Materials West Division from 2003 to 2006. | | | | | • | Chair and Co-CEO of Andretti Acquisition Corp., formerly a publicly traded special purpose acquisition company, from January 2022 to March 2024. | | | | | Other Experience | | | | | | • | Director of Comfort Systems USA, a mechanical, electrical, and plumbing services provider, since April 2018, where he is also a member of the audit and compensation committees. | | | | | • | Chair of the National Ready Mixed Concrete Association, an industry association, from March 2019 to March 2020. Mr. Sandbrook was awarded the William B. Allen award from the National Ready Mixed Concrete Association in March 2018 in recognition of his commitment to the concrete industry. | | | | | • | Inducted to the Pit & Quarry Hall of Fame in 2018, which recognizes individuals who have made significant contributions to the aggregate industry. | | | |

  39. Class III Directors with Terms Expiring at the 2026 Annual Meeting

    Class III Directors with Terms Expiring at the 2026 Annual Meeting

  40. Class III Directors with Terms Expiring at the 2026 Annual Meeting

    | | | Karen B. Fagg Age 70 | Independent Director Since 2023 Chair of the Board Nominating and Governance Committee | | | | Key Contributions to the Board: Through her management experience and knowledge in the fields of engineering, environment, and energy resource development, including four years as director of the Montana Department of Natural Resources and Conservation and over eight years as president, chief executive officer, and chair of her own engineering and environmental services company, as well as her service on a number of Montana state and community boards, Ms. Fagg contributes experience in responsible natural resource development with an informed perspective of the construction, engineering, and energy industries. | | | Professional Highlights | | | | | • | Vice president of DOWL LLC, dba DOWL HKM, an engineering and design firm, from April 2008 until her retirement in December 2011. | | | | • | President of HKM Engineering, Inc., Billings, Montana, an engineering and environmental services firm, from April 1995 to June 2000, and chair, chief executive officer, and majority owner from June 2000 through March 2008. HKM Engineering, Inc. merged with DOWL LLC in April 2008. | | | | • | Employed with MSE, Inc., Butte, Montana, an energy research and development company, from 1976 through 1988, and vice president of operations and corporate development director from 1993 to April 1995. | | | | • | Director of the Montana Department of Natural Resources and Conservation, the state agency charged with promoting stewardship of Montana’s water, soil, energy, and rangeland resources; and administering several grant and loan programs from 1989 through 1992. | | | | Other Experience | | | | | • | Former director of publicly traded MDU Resources, an energy delivery and construction services business, from 2005 until the Separation Date. | | | | • | Director and member of the quality committee of the Intermountain Health Peaks Region Board, a health care provider, since January 2023. | | | | • | Director and finance committee chair of the Montana State Fund, the state’s largest workers’ compensation insurance company, from March 2021 to present; Director of SCL Health Montana Regional Board from January 2020 to present, including a term as chair; and member of Carroll College Board of Trustees from 2005 through 2010, and from August 2019 through June 2022. | | | | • | Former member of several regional, state, and community boards, including director of St. Vincent’s Healthcare from October 2003 to October 2009 and January 2016 through January 2020, including a term as chair; director of the Billings Catholic Schools Board from December 2011 through December 2018, including a term as chair; the First Interstate BancSystem Foundation from June 2013 to 2016; the Montana Justice Foundation from 2013 to 2015; Montana Board of Investments from 2002 through 2006; Montana State University’s Advanced Technology Park from 2001 to 2005; and Deaconess Billings Clinic Health System from 1994 to 2002. | | |

  41. Class III Directors with Terms Expiring at the 2026 Annual Meeting

    | | | Brian R. Gray Age 53 | Director Since 2023 President and Chief Executive Officer | | | | Key Contributions to the Board: Serving as president and chief executive officer of Knife River Corporation since 2023, Mr. Gray is the only officer of the company that serves on our board. With over 30 years of experience at the company, he brings industry experience to the board, as well as extensive knowledge of our company and its business operations. He contributes valuable insight into management’s views and perspectives and the day-to-day operations of the company. | | | Professional Highlights | | | | | • | President of the company since January 1, 2023 and chief executive officer of the company since March 1, 2023, where he was instrumental in leading development of the company’s EDGE strategy. | | | | • | President of the company’s Northwest segment from January 2012 to December 2022, where he led the acquisition of eight companies and was instrumental in the development of the Knife River Training Center and corporate-wide safety, training, and sustainability programs; influential in the development of the company’s coaching clinic, “Life at Knife” recruiting effort and coaching approach to team development, along with the company’s core values of People, Safety, Quality, and Environment. | | | | Other Experience | | | | | • | Member of the board of directors of the National Ready Mixed Concrete Association, an industry association, since March 2022, including a three-year term from March 2018 to March 2021; member of the executive committee for one-year terms from 2020 to 2021, 2022 to 2023, and a new term for 2024 to 2025. | | | | • | Member of the board of directors of Oregon State University’s Construction Education Foundation from 2012 to present; president for a one-year term in 2022; and vice president for a one-year term in 2020. Mr. Gray was inducted as a member of the academy of distinguished engineers and was the recipient of the Oregon Stater Award in 2022, which recognizes alumni who have a profound impact on the engineering profession. | | | | • | Member of the board of directors of the Associated General Contractors Oregon-Columbia chapter, an industry association, from 2007 to present; president from 2017 to 2018; first vice president from 2016 to 2017; second vice president from 2015 to 2016; and secretary from 2014 to 2015. | | |

  42. Director Compensation for 2023

    Director Compensation for 2023 Our non-employee directors are compensated for their service according to the Knife River Corporation Director Compensation Policy. Only one company employee, Brian R. Gray, the company’s president and chief executive officer, serves as a director. Mr. Gray receives no additional compensation for his service on the board. Director compensation is reviewed annually by the compensation committee. The committee’s independent compensation consultant provided an analysis of the company’s director compensation for 2023. The December 2022 analysis included research on market trends in director compensation as well as a review of director compensation practices of companies in our compensation benchmarking peer group, which was comprised of the same companies used for purposes of benchmarking compensation for our named executive officers. The independent compensation consultant, Meridian, prepared a report on director compensation which indicated the company’s average annual cash and equity compensation for the company’s non-employee directors ranked in the 75th percentile of the company’s peer group. In May 2023, the board determined the annual cash and equity compensation for the company’s non-employee directors was appropriate and set the annual compensation of non-executive directors effective as of June 1, 2023, as follows:

  43. Director Compensation for 2023

    | | | Effective June 1, 2023 | | Annual Base Cash Retainer | | $110,000 | | Annual Additional Cash Retainers: | | | | Non-Executive Chair | | 125,000 | | Audit Committee Chair | | 20,000 | | Compensation Committee Chair | | 15,000 | | Nominating and Governance Committee Chair | | 15,000 | | Annual Stock Grant(1) - Directors (other than Non-Executive Chair) | | 150,000 | | Annual Stock Grant(2) - Non-Executive Chair | | 175,000 | | (1) | The annual stock grant is a grant of shares of company common stock equal in value to $150,000. | | | (2) | The annual stock grant is a grant of shares of company common stock equal in value to $175,000. | |

  44. Director Compensation for 2023

    Cash retainers are paid monthly. The annual stock grant for non-executive directors is for the director’s service provided during the calendar year. The award is granted in November following the regularly scheduled board meeting and is fully vested upon grant. Directors serving less than a full year receive a prorated stock award based on the number of months served in the applicable calendar year. There are no meeting fees paid to the directors. The following table outlines the compensation paid to our non-employee directors for 2023 for the period following the Separation.

  45. Director Compensation for 2023

    | Name | | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | German Carmona Alvarez | | 72,917 | 150,000 | 60 | 222,977 | | Thomas Everist | | 72,917 | 150,000 | 60 | 222,977 | | Karen B. Fagg | | 137,083 | 164,583 | 60 | 301,726 | | Patricia L. Moss | | 75,833 | 150,000 | 60 | 225,893 | | William J. Sandbrook | | 64,167 | 87,500 | 60 | 151,727 | | (1) | Directors receive an annual award of company common stock with a value of $150,000, except the non-executive chair who receives an award of company common stock with a value of $175,000, under the Knife River Corporation Long-Term Performance-Based Incentive Plan. Directors serving less than a full year receive a prorated stock award based on the number of months served, provided that for 2023 directors that served on the board of MDU Resources prior to the Separation received an award inclusive of their service on the MDU Resources board in accordance with the Separation related agreements. All stock awards are measured in accordance with generally accepted accounting principles for stock-based compensation in Accounting Standards Codification Topic 718. The grant date fair value is based on the closing price of our common stock on the grant date of November 15, 2023, which was $57.57 per share. The amount paid in cash for fractional shares is included in the amount reported in the stock awards column to this table. | | | | | | (2) | Includes group life insurance premiums paid on behalf of the director as applicable. Amounts for life insurance premiums reflect prorated amounts for directors serving less than a full year based on the number of months served. | | | | |

  46. Overview

    Overview Prior to the completion of the Separation on June 1, 2023, we were a wholly-owned subsidiary of MDU Resources. For the first five months of 2023, our named executive officers served in various roles for MDU Resources and its subsidiaries, and executive compensation decisions were determined by the compensation committee (the “MDU Resources Compensation Committee”) of the board of directors of MDU Resources (the “MDU Resources Board”) or MDU Resources management, as applicable. Information presented for the period of time prior to the Separation reflects the historical compensation philosophy, strategy and program designed by MDU Resources and approved by the MDU Resources Compensation Committee, as well as the consideration of such factors as the MDU Resources Compensation Committee or management of MDU Resources determined were appropriate for an organization of MDU Resources’ size and complexity. Upon the effectiveness of the Separation, our named executive officer compensation was adjusted pursuant to the offer letters that the named executive officers entered into with us to account for the Separation and their new roles as executive officers of Knife River. In connection with the Separation, MDU Resources outstanding equity awards were converted into Knife River equity awards, as described below. In 2024 and thereafter, our named executive officers will not receive any compensation from MDU Resources or participate in MDU Resources compensation programs and all decisions with respect to the compensation of our named executive officers will be made by the compensation committee or the board. While this section of our Proxy Statement describes the 2023 compensation program, we have also previewed executive compensation design changes that have been approved for 2024, which will be our first full compensation cycle as a standalone public company.

  47. Timeline of 2023 Executive Compensation

    Timeline of 2023 Executive Compensation Due to the mid-year Separation, named executive compensation changed during 2023. Between January 1, 2023 and May 31, 2023: Named executive officer compensation was determined by MDU Resources and company management and 2023 MDU Resources equity awards were approved by the MDU Resources Compensation Committee and MDU Resources Board. June 1, 2023: The Separation: •Offer letters: provided for applicable changes in title, base salary, annual cash incentive target compensation and long-term equity-based incentive awards. •Treatment of outstanding equity awards: MDU Resources equity-based awards that were outstanding immediately prior to the Separation and held by named executive officers were treated as follows: ◦Restricted stock units: at the effective time of the Separation, each award of MDU Resources restricted stock units held by a named executive officer was converted into an award of restricted stock units with respect to Knife River common stock and the number of shares subject to each such award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original MDU Resources award as measured immediately before and immediately after the Separation, subject to rounding. ◦Performance share awards: effective as of immediately prior to the Separation, the MDU Resources Board determined the level of performance for each completed fiscal year(s) within the applicable performance period based on actual performance results, and the performance level for each incomplete fiscal year within the applicable performance period was deemed to be achieved at the target level. Then, at the effective time of the Separation, each award of MDU Resources performance shares held by a named executive officer was converted into an award of restricted stock units with respect to Knife River common stock and the number of shares subject to each such award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original MDU Resources award (taking into account the determination of performance as of immediately prior to the Separation) as measured immediately before and immediately after the Separation, subject to rounding. July 12, 2023: In order to effectuate the increases in the 2023 long-term incentive equity award opportunity set forth in the offer letters, the offer letters for certain of the named executive officers contemplated that an additional award of restricted stock units would be granted to such named executive officers by Knife River after the Separation. Accordingly, as described in more detail below, on July 12, 2023, the compensation committee approved additional grants of Knife River time-based restricted stock units.

  48. Pay for Performance

    Pay for Performance To ensure management’s interests are aligned with those of our stockholders and the performance of the company, the majority of the CEO’s and the other named executive officers’ compensation is dependent on the achievement of company performance targets and long-term incentives. The charts below show the 2023 pay mix for the CEO and average 2023 pay mix of the other named executive officers, including base salary and the annual and long-term incentives at target.

  49. Annual Cash Incentive Awards

    Annual Cash Incentive Awards We are committed to linking our annual cash incentive awards for our executive officers to performance by rewarding achievement of financial performance measures and ensuring our executive officers are focused and accountable for our growth and profitability. Prior to the Separation, the MDU Resources Compensation Committee approved a target annual incentive award based on a percentage of the executive’s base salary. Upon the effectiveness of the Separation, the annual cash incentive targets for the CEO, CFO, COO and Vice President of Administration were adjusted pursuant to the offer letters that such named executive officers entered into with us to account for the Separation and their new roles as executive officers of Knife River, while the CLO’s annual cash incentive target remained the same following the Separation. Payouts for the CEO, CFO and vice president of administration were based solely on Knife River performance and strategic measures because such individuals were in positions at Knife River for all of 2023. In contrast, because the COO served as the president and chief executive officer of WBI Energy, Inc., an MDU Resources subsidiary, and the CLO served as the vice president, general counsel and secretary of MDU Resources, from January 1, 2023 until May 31, 2023, the MDU Resources Compensation Committee and MDU Resources Board certified the results and determined their payouts for the period of time during 2023 until the Separation was completed based on certain MDU Resources financial and strategic performance goals that were approved by the MDU Resources Compensation Committee and MDU Resources Board. After the Separation, the compensation committee completed a thorough review of the annual cash incentive award program and approved the Knife River annual incentive performance measures applicable to each named executive officer as well as the threshold, target and maximum award opportunity levels. No changes were made to the annual cash incentive awards as a percentage of base salary following the Separation. The actual annual cash incentive realized was determined by multiplying the target award by the payout percentage associated with the achievement of the executive’s performance measures, subject to proration, as described below. The applicable annual cash incentive award performance measures selected by the MDU Resources Compensation Committee and MDU Resources Board, and subsequently approved by the compensation committee following the Separation for each named executive officer were: •CEO: Adjusted EBITDA (as defined below) and Knife River Separation Performance (as defined below); •CFO: Adjusted EBITDA; •COO: WBI Energy, Inc. Adjusted Earnings from Continuing Operations (as defined below), Adjusted EBITDA and Knife River Separation Performance; •CLO: Combined Adjusted Plan Earnings of MDU Resources Business Units (as defined below), Knife River Separation Performance, Completion of MDU Construction Services Group, Inc. Strategic Review (as defined below) and Adjusted EBITDA; and •Vice President of Administration: Adjusted EBITDA. As described in more detail below, for 2023, the annual cash incentive award performance periods and payouts were divided and prorated based on the distinct performance periods utilized in 2023, largely due to the Separation. The applicable performance periods, weightings and other award details for each named executive officer are also described in more detail below. These performance measures were approved by the compensation committee following the Separation as the compensation committee determined that the performance measures for the company’s named executive officers previously selected and approved by the MDU Resources Compensation Committee were still appropriate for 2023 following the Separation. The MDU Resources Compensation Committee and the compensation committee also each approved diversity, equity and inclusion (DEI) modifiers as part of the 2023 annual cash incentive award program for certain named executive officers with the opportunity to add or deduct up to 5% of their annual cash incentive award target based on the achievement of the DEI initiatives as determined by the compensation committee, or the MDU Resources Compensation Committee, as applicable, in each case, subject to proration for 2023, as described in more detail below. See the “Annual Cash Incentives” section within this Compensation Discussion and Analysis for further details on our company’s annual cash incentive program. Strategic Bonus for Mr. Hastings In July 2023, the MDU Resources Compensation Committee and the MDU Resources Board awarded Mr. Hastings a $100,000 bonus for his work on a strategic review of MDU Construction Services Group, Inc.

  50. Long-Term Equity-Based Incentive Awards

    Long-Term Equity-Based Incentive Awards In February 2023, the MDU Resources Compensation Committee and the MDU Resources Board approved grants of MDU Resources time-based restricted stock units which were eligible to vest into MDU Resources common stock, plus dividend equivalents, on December 31, 2025. In connection with the Separation, these MDU Resources time-based restricted stock units converted into an award of restricted stock units with respect to Knife River common stock at the effective time of the Separation, and the number of shares subject to each such award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original MDU Resources award as measured immediately before and immediately after the Separation, subject to rounding. As discussed in more detail below, in July 2023 the compensation committee approved grants of Knife River time-based restricted stock units which are eligible to vest into Knife River common stock, plus dividend equivalents, on December 31, 2025. The restricted stock units enhance alignment with stockholders and serve as a retention tool. The restricted stock units will vest at the end of 2025, as long as the executive remains continuously employed with Knife River. The MDU Resources Compensation Committee did not award performance shares for the 2023-2025 performance period in February 2023 due in part to, according to MDU Resources, the then-pending Separation. MDU Resources reported that the MDU Resources Compensation Committee awarded only time-based restricted stock units in February 2023 due to MDU Resources’ significant strategic initiatives underway at the time and as a means of retention for executive officers of both entities during the pending Separation process. As contemplated by the offer letters that the named executive officers entered into with us in connection with the Separation, the compensation committee approved additional grants of Knife River time-based restricted stock units in July 2023 following the Separation because the value of the MDU Resources time-based restricted stock unit awards granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023 only represented a portion of the the total value for the 2023 long-term equity-based incentive award grants set forth in the applicable offer letters, other than with respect to the CLO, for whom the total long-term equity-based incentive award amount contemplated by his offer letter was granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023. See the “Long-Term Incentives” section within this Compensation Discussion and Analysis for further details on the company’s long-term incentive program.

  51. Compensation Practices

    | What We Do | | | ☑ | At-Risk Compensation - The majority of the executive compensation program is at-risk, with incentive components tied to market industry practices to ensure the financial success of the company. | | ☑ | Independent Compensation Committee - All members of the compensation committee meet the independence standards under the NYSE listing standards and the SEC rules. | | ☑ | Independent Compensation Consultant - The compensation committee retains an independent compensation consultant to evaluate executive compensation plans and practices. | | ☑ | Competitive Compensation - Executive compensation reflects executive performance, experience, relative value compared to other positions within the company, relationship to competitive market value compensation, corporate and business segment economic environment, and the actual performance of the overall company and the business segments against pre-established goals. As discussed in the 2024 annual and long-term incentive preview section, the compensation committee awarded performance shares and time-based restricted stock units in February 2024 and intends to continue such practice going forward. | | ☑ | Annual Cash Incentive - Payment of annual cash incentive awards is based on overall pre-established annual company performance measured in terms of Adjusted EBITDA, and for certain executives, other strategic objectives. | | ☑ | Balanced Mix of Pay Components - The target compensation mix represents a balance of annual cash and long-term equity-based compensation. | | ☑ | Annual Compensation Risk Analysis - Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment. | | ☑ | Stock Ownership and Retention Requirements - Executive officers are required to own, within five years of appointment or promotion, company common stock equal to a multiple of their base salary. Our CEO is required to own stock equal to six times his base salary, and the other named executive officers are required to own stock equal to two or three times their base salary. Net share awards must also be held until share ownership requirements are met. | | ☑ | Clawback Policy - If the company’s audited financial statements are restated due to any material noncompliance with the financial reporting requirements under the securities laws, the company is required to pursue recoupment of certain “erroneously awarded” compensation paid to our executive officers. | | What We Do Not Do | | | ☒ | Stock Options - The company does not use stock options as a form of incentive compensation. | | ☒ | Employment Agreements - Executives do not have employment agreements entitling them to specific payments upon termination or a change of control of the company. | | ☒ | Perquisites - Executives do not receive perquisites that materially differ from those available to employees in general. | | ☒ | Hedge Stock - Executives are not allowed to hedge company securities. | | ☒ | Pledge Stock - Executives are not allowed to pledge company securities in margin accounts or as collateral for loans. | | ☒ | No Dividends or Dividend Equivalents on Unvested Shares - We do not provide for payment of dividends or dividend equivalents on unvested share awards. | | ☒ | Tax Gross-Ups - Executives do not receive tax gross-ups on their compensation. |

  52. Components of Compensation

    | (2) Prior to the Separation, the MDU Resources Compensation Committee approved a target annual incentive award based on a percentage of the executive’s base salary. Upon the effectiveness of the Separation, the annual cash incentive targets for the CEO, CFO, COO and vice president of administration were adjusted pursuant to the offer letters that such named executive officers entered into with us to account for the Separation and their new roles as executive officers of Knife River, while the CLO’s annual cash incentive target remained the same following the Separation. Payouts for the CEO, CFO and vice president of administration were based solely on Knife River performance and strategic measures because such individuals were in positions at Knife River for all of 2023. In contrast, because the COO served as the president and chief executive officer of WBI Energy, Inc., an MDU Resources subsidiary, and the CLO served as the vice president, general counsel and secretary of MDU Resources, from January 1, 2023 until May 31, 2023, the MDU Resources Compensation Committee certified the results and determined their payouts for the period of time during 2023 until the Separation was completed based on certain MDU Resources financial and strategic performance goals that were approved by the MDU Resources Compensation Committee. After the Separation, the compensation committee completed a thorough review of the annual cash incentive award program and approved the Knife River annual incentive performance measures applicable to each named executive officer as well as the threshold, target and maximum award opportunity levels. No changes were made to the annual cash incentive awards as a percentage of base salary following the Separation. For more information, please see “2023 Compensation for Our Named Executive Officers-2023 Base Salary and Incentive Targets.” | | (3) The MDU Resources Compensation Committee did not award performance shares for the 2023-2025 performance period in February 2023 due in part to, according to MDU Resources, the then-pending Separation. MDU Resources reported that the MDU Resources Compensation Committee awarded only time-based restricted stock units in February 2023 due to MDU Resources’ significant strategic initiatives underway at the time and as a means of retention for executive officers of both entities during the pending Separation process. Similarly, and as discussed in more detail in “2023 Compensation for Our Named Executive Long-Term Incentives,” the compensation committee granted time-vesting restricted stock units in July 2023 as contemplated by the offer letters that the named executive officers entered into with us in connection with the Separation. As discussed in the “2024 Annual and Long-Term Incentive Preview” section, the compensation committee awarded performance shares and time-vesting restricted stock units in February 2024 and intends to continue such practice going forward. |

  53. Peer Groups

    Peer Groups The compensation committee reviews the peer companies used for compensation analysis of executive positions to assess ongoing relevance and credibility.

  54. Compensation Benchmarking Peer Groups

    Compensation Benchmarking Peer Groups Prior to the Separation, the MDU Resources Compensation Committee, with the assistance of its independent compensation consultant, determined and used a peer group that it believed was aligned with Knife River’s business and size to determine the compensation of our named executive officers in effect post-Separation, which the compensation committee continued to utilize in 2023 following the Separation. The MDU Resources Compensation Committee’s independent compensation consultant aided in the selection of appropriate peer companies for our compensation benchmarking peer group by evaluating potential peer companies in the construction materials, building products, construction and engineering, and other related industries within the material sector which are similar in size in terms of revenues and market capitalization as well as being based in the United States and publicly-traded on a major United States stock exchange. For review of compensation of the CEO, CFO, and CLO positions, the MDU Resources independent compensation consultant used market data from 16 peer companies. For review of the COO and vice president of administration positions, the MDU Resources independent compensation consultant used compensation data from additional companies in Willis Towers Watson’s 2022 General Industry Executive Compensation Survey. Companies used for compensation analysis by the MDU Resources Compensation Committee for the CEO, CFO and CLO in anticipation of the Separation and effective upon the Separation included:

  55. Compensation Benchmarking Peer Groups

    | 2023 Compensation Benchmarking Peer Group Companies | | | | Allegion plc | Gibraltar Industries, Inc. | Sterling Infrastructure, Inc. | | Arcosa, Inc. | Granite Construction Incorporated | Summit Materials, Inc. | | Armstrong World Industries, Inc. | Martin Marietta Materials, Inc. | The AZEK Company Inc. | | Construction Partners, Inc. | Masonite International Corporation | Vulcan Materials Company | | Dycom Industries, Inc. | Minerals Technologies Inc. | | | Eagle Materials Inc. | Simpson Manufacturing Co., Inc. | | | All companies shown above are the companies used for benchmarking compensation analysis of the CEO; all companies shown, except Construction Partners, Inc. are the companies used for compensation analysis for the CFO; and the companies shown in bold are the companies used for compensation analysis for the CLO. | | |

  56. Compensation Benchmarking Peer Groups

    Companies used for compensation analysis by the MDU Resources Compensation Committee for the COO and the vice president of administration in anticipation of the Separation and effective upon the Separation included the following companies from the Willis Towers Watson 2022 General Industry Executive Compensation Survey:

  57. 2022 Compensation Benchmarking Peer Group Companies

    2022 Compensation Benchmarking Peer Group Companies

  58. 2022 Compensation Benchmarking Peer Group Companies

    | Alliant Energy Corporation | Evergy, Inc. | Pinnacle West Capital Corporation | | Ameren Corporation | Granite Construction Incorporated | Portland General Electric Company | | Atmos Energy Corporation | KBR, Inc. | Quanta Services, Inc. | | Black Hills Corporation | Martin Marietta Materials, Inc. | Southwest Gas Holdings, Inc. | | CMS Energy Corporation | MasTec, Inc | Summit Materials, Inc. | | Dycom Industries, Inc. | MYR Group Inc. | Vulcan Materials Company | | EMCOR Group, Inc. | NiSource Inc. | WEC Energy Group, Inc. |

  59. 2022 Compensation Benchmarking Peer Group Companies

    For the period from January 1, 2023 to the Separation Date, the companies listed in the table below were used for compensation analysis for the COO in his role as CEO of WBI Energy, Inc.

  60. 2023 Base Salary and Incentive Targets

    2023 Base Salary and Incentive Targets At its November 2022 meeting, the MDU Resources Compensation Committee and the president and CEO of MDU Resources and the president and CEO of Knife River, with respect to certain named executive officers, approved the 2023 base salaries as well as the target annual and long-term incentive compensation for our named executive officers. At its March 2023 meeting, the MDU Resources Compensation Committee approved offer letters in connection with the Separation to establish the annual incentive performance measures and goals for our named executive officers. The offer letters with each of our named executive officers provided for, in most cases, base salary and annual incentive target increases, effective as of the Separation. Following the Separation, the compensation committee did not make any further adjustments to the base salaries or annual incentive targets for 2023. In determining base salaries, target annual cash incentives, target long-term equity incentives, and total target compensation for our named executive officers, the MDU Resources Compensation Committee received and considered individual performance, market and peer data, responsibilities, experience, tenure in position, internal equity, and input and recommendations from MDU Resources’ CEO, and the independent compensation consultant of the MDU Resources Compensation Committee. The following information relates to each named executive officer’s 2023 base salary, target annual cash incentive, target long-term equity incentive, and total target compensation, effective upon the Separation:

  61. 2023 Base Salary and Incentive Targets

    | Brian R. Gray | 2023 ($) | Compensation Component as a % of Base Salary | | Base Salary | 800,000 | | | Target Annual Cash Incentive Opportunity | 920,000 | 115% | | Target Long-Term Equity Incentive Opportunity | 3,000,000 | 375% | | Total Target Compensation | 4,720,000 | | | Prior to the Separation, Mr. Gray’s compensation was determined by the president and CEO of MDU Resources and the president and CEO of Knife River, with a base salary of $400,000, a target annual cash incentive opportunity of 60% of base salary and a target long-term equity incentive opportunity of 100% of base salary, respectively, in his position as president of Knife River, effective January 1, 2023. His compensation was further adjusted by the MDU Resources Compensation Committee at its February 2023 meeting in connection with his promotion to president and CEO of Knife River to a base salary of $500,000, a 25% increase, target annual cash incentive opportunity of 75% of base salary, a 25% increase, and target long-term equity incentive opportunity of 170% of base salary, a 70%, increase, respectively, effective March 1, 2023. For purposes of Mr. Gray’s compensation following the Separation, the MDU Resources Compensation Committee considered information provided in the December 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant when determining Mr. Gray’s compensation in his role as president and CEO of Knife River, effective upon the Separation, and set Mr. Gray’s base salary at $800,000, a 60% increase, target annual cash incentive opportunity at 115% of base salary, an approximate 53% increase, and target long-term equity time-based award value at 375% of base salary, an approximate 121% increase, respectively, as set forth in his offer letter. These increases were based on input from the MDU Resources Compensation Committee’s independent compensation consultant to more closely align his compensation with the market median for his position in his role following the Separation. | | |

  62. 2023 Base Salary and Incentive Targets

    | Nathan W. Ring | 2023 ($) | Compensation Component as a % of Base Salary | | Base Salary | 450,000 | | | Target Annual Cash Incentive Opportunity | 337,500 | 75% | | Target Long-Term Equity Incentive Opportunity | 675,000 | 150% | | Total Target Compensation | 1,462,500 | | | Prior to the Separation, Mr. Ring’s compensation was determined by the president and CEO of Knife River, setting a base salary of $316,580, a target annual cash incentive opportunity of 40% of base salary and a target long-term equity incentive opportunity of 55% of base salary, respectively, in his position as vice president of business development of Knife River, effective January 1, 2023. For purposes of Mr. Ring’s compensation following the Separation, the MDU Resources Compensation Committee considered information provided in the December 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant when determining Mr. Ring’s compensation in his role as CFO of Knife River, effective upon the Separation, and set Mr. Ring’s base salary at $450,000, a 42% increase, target annual cash incentive opportunity at 75.0% of base salary, an 88% increase, and target long-term equity time-based award value at 150% of base salary, a 173% increase, respectively, as set forth in his offer letter. These increases were based on input from the MDU Resources Compensation Committee’s independent compensation consultant to more closely align his compensation with the market median for his position in his role following the Separation. | | |

  63. 2023 Base Salary and Incentive Targets

    | Trevor J. Hastings | 2023 ($) | Compensation Component as a % of Base Salary | | Base Salary | 500,000 | | | Target Annual Cash Incentive Opportunity | 375,000 | 75% | | Target Long-Term Equity Incentive Opportunity | 750,000 | 150% | | Total Target Compensation | 1,625,000 | | | Prior to the Separation, Mr. Hastings’ compensation was determined by the MDU Resources Compensation Committee at its November 2022 meeting and the MDU Resources Compensation Committee considered information provided in the August 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant, with a base salary of $420,000, a target annual cash incentive opportunity of 60% of base salary and a target long-term equity incentive opportunity of 100% of base salary, respectively, in his role of president and CEO of WBI Energy, Inc., an MDU Resources subsidiary, effective January 1, 2023. For purposes of Mr. Hastings’ compensation following the Separation, the MDU Resources Compensation Committee considered information provided in the December 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant when determining Mr. Hastings’ compensation in his role as COO of Knife River, effective upon the Separation, and set Mr. Hastings’ base salary at $500,000, a 19% increase, target annual cash incentive opportunity at 75% of base salary, a 25% increase, and target long-term equity time-based award value at 150% of base salary, a 50% increase, respectively, as set forth in his offer letter. These increases were based on input from the MDU Resources Compensation Committee’s independent compensation consultant to more closely align his compensation with the market median for his position in his role following the Separation. | | |

  64. 2023 Base Salary and Incentive Targets

    | Karl A. Liepitz | 2023 ($) | Compensation Component as a % of Base Salary | | Base Salary | 470,000 | | | Target Annual Cash Incentive Opportunity | 352,500 | 75% | | Target Long-Term Equity Incentive Opportunity | 799,000 | 170% | | Total Target Compensation | 1,621,500 | | | Prior to the Separation, Mr. Liepitz’s compensation was determined by the MDU Resources Compensation Committee at its November 2022 meeting and the MDU Resources Compensation Committee considered information provided in the August 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant, with a base salary of $470,000, a target annual cash incentive opportunity of 75% of base salary and a target long-term equity incentive opportunity of 170% of base salary, respectively, in his role of vice president, general counsel and secretary of MDU Resources. The MDU Resources Compensation Committee did not make any changes to Mr. Liepitz’s compensation in 2023, either in connection with the Separation or otherwise. | | |

  65. 2023 Base Salary and Incentive Targets

    | Nancy K. Christenson | 2023 ($) | Compensation Component as a % of Base Salary | | Base Salary | 350,000 | | | Target Annual Cash Incentive Opportunity | 210,000 | 60% | | Target Long-Term Equity Incentive Opportunity | 350,000 | 100% | | Total Target Compensation | 910,000 | | | Prior to the Separation, Ms. Christenson’s compensation was determined by the President and CEO of Knife River Corporation, setting a base salary of $292,600, a target annual cash incentive opportunity of 40% of base salary and a target long-term equity incentive opportunity of 55% of base salary, in her position as vice president of administration of Knife River, effective January 1, 2023. For purposes of Ms. Christenson’s compensation following the Separation, the MDU Resources Compensation Committee considered information provided in the December 2022 compensation study provided by the MDU Resources Compensation Committee’s independent compensation consultant when determining Ms. Christenson’s compensation in her role as vice president of administration of Knife River, effective upon the Separation, and set Ms. Christenson’s base salary at $350,000, a 20% increase, target annual cash incentive opportunity at 60% of base salary, a 50% increase, and target long-term equity time-based award value at 100% of base salary, an approximate 82% increase, respectively, as set forth in her offer letter. These increases were based on input from the MDU Resources Compensation Committee’s independent compensation consultant to more closely align her compensation with the market median for her position in her role following the Separation. | | |

  66. Annual Cash Incentives

    Annual Cash Incentives Executives earn annual cash incentives through the achievement of financial performance or a combination of financial and strategic performance goals. The performance measures selected are designed to ensure that compensation to the executives reflects the success of Knife River. Prior to the Separation, the MDU Resources Compensation Committee approved a target annual incentive award based on a percentage of the executive’s base salary. Upon the effectiveness of the Separation, the annual cash incentive targets for the CEO, CFO, COO and vice president of administration were adjusted pursuant to the offer letters that such named executive officers entered into with us to account for the Separation and their new roles as executive officers of Knife River, while the CLO’s annual cash incentive target remained the same following the Separation. Payouts for the CEO, CFO and vice president of administration were based solely on Knife River performance and strategic measures because such individuals were in positions at Knife River for all of 2023. In contrast, because the COO served as the president and chief executive officer of WBI Energy, Inc., an MDU Resources subsidiary, and the CLO served as the vice president, general counsel and secretary of MDU Resources, from January 1, 2023 until May 31, 2023, the MDU Resources Compensation Committee certified the results and determined their payouts for the period of time during 2023 until the Separation was completed based on certain MDU Resources financial and strategic performance goals that were approved by the MDU Resources Compensation Committee. With respect to the COO and CLO, annual incentive performance for the period of time from January 1, 2023 until May 31, 2023 was measured by the MDU Resources Compensation Committee under the MDU Resources annual cash incentive program after the Separation. Following the Separation, the COO and the CLO no longer participated in the MDU Resources annual cash incentive program, and became eligible to participate in Knife River’s annual cash incentive program. After the Separation, the compensation committee completed a thorough review of the annual cash incentive award program and approved the Knife River annual incentive performance measures applicable to each named executive officer as well as the threshold, target and maximum award opportunity levels. No changes were made to the annual cash incentive awards as a percentage of base salary following the Separation. For 2023, the performance measures and their applicable weightings were:

  67. Annual Cash Incentives

    | | Name | Performance Period | Performance Measure | Weighting (%) | | Brian R. Gray | | January 1, 2023 - February 28, 2023(1) | Adjusted EBITDA(2) | 100 | | | | March 1, 2023 - December 31, 2023(1) | Adjusted EBITDA(2) | 80 | | | | | Knife River Separation Performance(3) | 20 | | Nathan W. Ring | | January 1, 2023 - December 31, 2023(4) | Adjusted EBITDA(2) | 100 | | Trevor J. Hastings | | January 1, 2023 - May 31, 2023(5) | WBI Energy, Inc. Adjusted Earnings from Continuing Operations(6) | 100 | | | | June 1, 2023 - December 31, 2023(5) | Adjusted EBITDA(2) | 80 | | | | | Knife River Separation Performance(3) | 20 |

  68. Annual Cash Incentives

    | Karl A. Liepitz | | January 1, 2023 - May 31, 2023(7) | Combined Adjusted Plan Earnings of MDU Resources Business Units(8) | 60 | | | | | Knife River Separation Performance(3) | 20 | | | | | Completion of MDU Construction Services Group, Inc. Strategic Review(9) | 20 | | | | June 1, 2023 - December 31, 2023(7) | Adjusted EBITDA(2) | 80 | | | | | Knife River Separation Performance(3) | 20 | | Nancy K. Christenson | | January 1, 2023 - December 31, 2023(10) | Adjusted EBITDA(2) | 100 | | (1) | Mr. Gray was promoted to president and CEO of Knife River, effective March 1, 2023, and his compensation was adjusted at such time. As detailed below, Mr. Gray’s performance periods and payouts were divided and prorated based on his time of service (a) prior to the Separation as (i) president of Knife River from January 1, 2023 until February 28, 2023 and (ii) president and CEO of Knife River from March 1, 2023 until May 31, 2023 and (b) following the Separation, as president and CEO of Knife River from June 1, 2023 until December 31, 2023. | | | | | (2) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization (EBITDA) of Knife River, as further adjusted for (i) the effect on EBITDA from asset sales/dispositions/retirements; (ii) the effect on EBITDA from transaction costs incurred for acquisitions, divestitures, mergers, spin-offs, or other strategic transactions, including difference in interest costs from that assumed in the original operating plan; (iii) the effect on EBITDA from withdrawal liabilities relating to multiemployer pension plans; (iv) the effect on EBITDA of corporate overhead allocation differences from MDU Resources; (v) differences in costs associated with approved retention agreements from what is included in the original operating plan; and (vi) cost differences associated with implementing processes formerly performed by MDU Resources. For the 2023 annual cash incentive, the compensation committee approved adjustments for the Separation costs associated with implementing processes formerly performed by MDU Resources and transaction costs associated with acquisitions. | | | | | (3) | Knife River Separation Performance measure is defined as the completion of the work associated with the spin-off of Knife River as a separate public company, including the beginning of work necessary to complete the Separation, the filing of the final Registration Statement on Form 10 with the SEC and the successful completion of the Separation. | | | | | (4) | Mr. Ring was named CFO of Knife River, effective upon the Separation, and his compensation was adjusted at such time. While Mr. Ring’s performance period was not divided, his payout was prorated based on his time of service (a) prior to the Separation as vice president of business development of Knife River from January 1, 2023 until May 31, 2023 and (b) following the Separation, as CFO of Knife River from June 1, 2023 until December 31, 2023. | | | | | (5) | Mr. Hastings was named COO of Knife River, effective upon the Separation, and his compensation was adjusted at such time. As detailed below, Mr. Hastings’ performance periods and payouts were divided and prorated based on his time of service (a) prior to the Separation as president and CEO of WBI Energy, Inc. from January 1, 2023 until May 31, 2023 and (b) following the Separation, as COO of Knife River from June 1, 2023 until December 31, 2023. | | | | | (6) | WBI Energy, Inc. Adjusted Earnings from Continuing Operations is defined as WBI Energy, Inc. earnings before discontinued operations, plus losses from any operations discontinued after December 31, 2022, as adjusted for (i) the effect on earnings from asset sales/dispositions/retirements; (ii) the effect on earnings from transaction costs incurred for acquisitions, divestitures, mergers, spin-offs, or other strategic transactions not anticipated in the original operating plan; (iii) the effect on earnings for unanticipated changes and interpretation of tax law; (iv) the effect on earnings or EBITDA of corporate overhead allocation differences from MDU Resources; and (v) differences in costs associated with approved retention agreements from what is included in the original operating plan. For the 2023 MDU Resources annual cash incentive, the MDU Resources Compensation Committee approved adjustments for Separation costs incurred related to the spin-off of Knife River. | | | | | (7) | Mr. Liepitz was named CLO of Knife River, effective upon the Separation, but his compensation was not adjusted at such time. As detailed below, Mr. Liepitz’s performance periods and payouts were divided and prorated based on his time of service (a) prior to the Separation as vice president, general counsel and secretary of MDU Resources from January 1, 2023 until May 31, 2023 and (b) following the Separation, as CLO of Knife River from June 1, 2023 until December 31, 2023. | | | |

  69. Annual Cash Incentives

    | (8) Combined Adjusted Plan Earnings of MDU Resources Business Units is defined as MDU Resources earnings before discontinued operations, plus losses from any operations discontinued after December 31, 2022, as adjusted for (i) the effect on earnings or EBITDA from asset sales/dispositions/retirements; (ii) the effect on earnings from transaction costs incurred for acquisitions, divestitures, mergers, spin-offs, or other strategic transactions, including difference in interest costs from that assumed in the original operating plan; (iii) the effect on earnings for unanticipated changes and interpretation of tax law; (iv) the effect on earnings from withdrawal liabilities relating to multiemployer pension plans; (v) the effect on earnings of corporate overhead allocation differences; and (vi) differences in costs associated with approved retention agreements from what is included in the original operating plan. For the 2023 MDU Resources annual cash incentive, the MDU Resources Compensation Committee approved adjustments for Separation costs incurred related to the spin-off of Knife River and strategic review of MDU Construction Services Group, Inc. | | (9) Completion of MDU Construction Services Group, Inc. Strategic Review is defined as the completion of work associated with the strategic review of MDU Construction Services Group, Inc. including the beginning of work necessary to complete the strategic review, the public announcement of the completion of such strategic review and the completion of a transaction. | | (10) Ms. Christenson served in her role as vice president of administration of Knife River for all of 2023, and her compensation was adjusted at the time of the Separation. While Ms. Christenson’s performance period was not divided, her payout was prorated based on her time of service (a) prior to the Separation from January 1, 2023 until May 31, 2023 and (b) following the Separation from June 1, 2023 until December 31, 2023. |

  70. Annual Cash Incentives

    The following table sets forth the reasons why the MDU Resources Compensation Committee selected, and the compensation committee, following the Separation, later approved the annual cash incentive performance measures.

  71. Annual Cash Incentives

    | Performance Measure | Reason Selected | | Adjusted EBITDA | Financial performance metric common to the construction industry and encourages focus on growth by excluding the impact of items such as taxes, interest, depreciation and amortization from the performance result which are largely out of the control of our named executive officers that impact our performance targets but are not indicative of underlying business performance. In addition, to incentivize executives to make decisions that have long-term positive impact, even at the expense of short-term results, and to prevent one-time gains and losses from having an undue impact on incentive payments. 2023 Adjusted EBITDA target was set at $324.953 million, which represents the financial goal needed to achieve a return on investment to drive success of the company. | | Knife River Separation Performance | To incentivize completion of the work associated with the spin-off of Knife River as a separate public company. | | WBI Energy, Inc. Adjusted Earnings from Continuing Operations | To incentivize financial performance needed to achieve value based earnings and rate base. | | Combined Adjusted Plan Earnings of MDU Resources Business Units | To incentivize successful achievement of performance expectations associated with its business segments and the overall company. | | Completion of MDU Construction Services Group, Inc. Strategic Review | To incentivize completion of the work associated with the strategic review of MDU Construction Services Group, Inc. |

  72. Annual Cash Incentives

    In addition to the financial performance measures, a DEI modifier was included as part of the annual incentive for the CEO, the COO and the CLO. A DEI modifier did not apply to the CEO until his promotion to CEO on March 1, 2023. The DEI modifier was associated with MDU Resources and all its business units together for the period of time from January 1, 2023 until May 31, 2023. Following the Separation, a DEI modifier applied to Knife River only. The DEI modifier was a separate performance measure, independent of the achievement of the financial performance measures and was based on the compensation committee’s (or, the MDU Resources Compensation Committee’s, as applicable) assessment of management’s progress toward the completion of the following DEI initiatives (with respect to Knife River or MDU Resources, as applicable): •Expand the formal succession planning process to include the review of the positions of all Section 16 officers, key executives and segment presidents to help ensure diverse representation in terms of gender, ethnicity, individuals with disabilities and veteran status and the development of candidates being prepared for these positions. •Increase outreach activities and efforts aimed at attracting diverse candidates to positions within our business. •Implement a consistent human resources dashboard across all business segments to build a baseline of information and track key metrics that provide insight into the make-up and diversity of our employee population. •Foster a culture that supports diverse views and backgrounds. The DEI modifier adds or deducts up to 5% of an executive’s annual incentive target based on the compensation committee’s (or, the MDU Resources Compensation Committee’s, as applicable) assessment. To determine the payout associated with each financial performance measure: •Actual performance results are compared to the target performance measure which results in the percent of target achieved. •The percent of target achieved is translated into a payout percentage of the executive’s target award opportunity using linear interpolations for results between threshold and target as well as target and maximum. Achievement of 100% of the target performance measure results in a payout of 100% of the target award opportunity. Results achieved below the established threshold result in no payout. In addition, as a result of the Separation (or, with respect to Mr. Gray, his promotions), the payouts for the named executive officers were prorated based on the performance period and, in some cases, performance measures, applicable to such named executive officer as a percentage of the entire year. The threshold, target and maximum performance levels as well as the associated payout opportunity are depicted in the following chart:

  73. Annual Cash Incentives

    | | | Threshold | | Target | | Maximum | | | Performance Measure | | % of Target | Payout % | | Payout % | % of Target | Payout % | | Adjusted EBITDA | | 75% | 25% | $324.953 million | 100% | 115% | 250% | | Knife River Separation Performance | | (1) | 25% | (1) | 100% | (1) | 200% | | WBI Energy, Inc. Adjusted Earnings from Continuing Operations | | 85% | 25% | $11.538 million | 100% | 115% | 200% | | Combined Adjusted Plan Earnings of MDU Resources Business Units | | 85% | 50% | $101.234 million | 100% | 115% | 200% | | Completion of MDU Construction Services Group, Inc. Strategic Review | | (2) | 25% | (2) | 100% | (2) | 200% | | (1) | The metrics used for the threshold, target and maximum for Knife River Separation Performance were (i) beginning of work necessary to complete the Separation, (ii) the filing of the final Registration Statement on Form 10 with the SEC and (iii) the successful completion of the Separation, respectively. | | | | | | | | (2) | The metrics used for the threshold, target and maximum for Completion of MDU Construction Services Group, Inc. Strategic Review were (i) beginning of work necessary to complete the strategic review, (ii) the public announcement of the completion of such strategic review and (iii) the completion of a transaction, respectively. | | | | | | |

  74. 2023 Annual Incentive Results

    2023 Annual Incentive Results The 2023 performance measure results, percent of target achieved based on those results, and the associated payout percentages reflect the company’s 2023 financial performance and are presented below. In addition, as a result of the Separation (or, with respect to Mr. Gray, his promotions), the payouts for the named executive officers were prorated based on the performance period and, in some cases, performance measures, applicable to such named executive officer as a percentage of the entire year, as presented below:

  75. Brian R. Gray

    | Performance Period | | Performance Measure | Result ($) | Percent of Performance Measure Achieved (%) | Percent of Award Opportunity Payout (%) | Weight Applicable to the Performance Period (%) | Weighted Award Opportunity Payout % (%) | Proration Applicable to the Performance Period (%)(1) | Prorated Award Opportunity Payout % (%)(1) | | January 1, 2023 - February 28, 2023 | | Adjusted EBITDA (2) | 432,064 | 132.96 | 250.0 | 100 | 250.0 | 16.7 | 41.8 | | March 1, 2023 - May 31, 2023 | | Adjusted EBITDA (2) | 432,064 | 132.96 | 250.0 | 80 | 200.0 | 25.0 | 50.0 | | | | Knife River Separation Performance | Achieved at Maximum | | 200.0 | 20 | 40.0 | 25.0 | 10.0 | | June 1, 2023 - December 31, 2023 | | Adjusted EBITDA (2) | 432,064 | 132.96 | 250.0 | 80 | 200.0 | 58.3 | 116.6 | | | | Knife River Separation Performance | Achieved at Maximum | | 200.0 | 20 | 40.0 | 58.3 | 23.3 | | Total | | | | | | | | | 241.7 | | (1) | Mr. Gray’s annual incentive performance periods are reflected in the table above and payouts were prorated based on his time of service (a) prior to the Separation as (i) president of Knife River from January 1, 2023 until February 28, 2023 and (ii) president and CEO of Knife River from March 1, 2023 until May 31, 2023 and (b) following the Separation, as president and CEO of Knife River from June 1, 2023 until December 31, 2023. Mr. Gray was promoted to president and CEO of Knife River, effective March 1, 2023, and his annual incentive target was increased at such time. In addition, on June 1, 2023, Mr. Gray’s annual incentive target was further increased in connection with the Separation pursuant to his offer letter. Accordingly, the annual incentive for (i) approximately 16.7% of the annual performance period (January 1, 2023 until February 28, 2023) was based on a 60% target of base salary, (ii) 25% of the annual performance period (March 1, 2023 until May 31, 2023) was based on a 75% target of base salary and (iii) 58% of the annual performance period (June 1, 2023 until December 31, 2023) was based on a 115% target of base salary, and the associated payouts for the two performance periods within the annual performance period were prorated as set forth in the table above. However, despite the increase to Mr. Gray’s annual incentive target in connection with the Separation, the performance measures within the second performance period were only measured from March 1, 2023 until December 31, 2023, while the associated payouts for the two performance periods within such period of time were prorated as set forth above, resulting in the blended prorated percentage for March 1, 2023 until December 31, 2023, as shown in the table above. The results of Mr. Gray’s incentive for the entire year were certified by the Knife River compensation committee. | | | | | | | | | | (2) | Adjusted EBITDA used in the incentive calculation is EBITDA, as reported, adjusted to exclude the effect of one-time Separation costs and transaction costs associated with acquisitions. In determining the 2023 annual incentive awards, the compensation committee approved adjustments to EBITDA of $9,961,975 for costs associated with the spin-off and $99,000 for costs related to acquisitions. | | | | | | | | |

  76. Nathan W. Ring

    | Performance Period | | Performance Measure | Result ($) | Percent of Performance Measure Achieved (%) | Percent of Award Opportunity Payout (%) | Weight Applicable to the Performance Period (%) | Weighted Award Opportunity Payout % (%) | Proration Applicable to the Performance Period (%)(1) | Prorated Award Opportunity Payout % (%)(1) | | January 1, 2023 - May 31, 2023 | | Adjusted EBITDA(2) | 432,064 | 132.96 | 250.0 | 100 | 250.0 | 41.7 | 104.2 | | June 1, 2023 - December 31, 2023 | | Adjusted EBITDA(2) | 432,064 | 132.96 | 250.0 | 100 | 250.0 | 58.3 | 145.8 | | Total | | | | | | | | | 250.0 | | (1) | Mr. Ring’s annual incentive performance period is reflected in the table above and payouts were prorated based on his time of service (a) prior to the Separation as vice president of business development of Knife River from January 1, 2023 until May 31, 2023 and (b) following the Separation, as CFO of Knife River from June 1, 2023 until December 31, 2023. Mr. Ring was named CFO of Knife River, effective upon the Separation, and his compensation was adjusted at such time such that on June 1, 2023 Mr. Ring’s annual incentive target was increased in connection with the Separation pursuant to his offer letter. However, despite the increase to Mr. Ring’s annual incentive target in connection with the Separation, the performance measure was only measured from January 1, 2023 until December 31, 2023, while the associated payouts for the 2023 performance period were prorated as set forth above. Accordingly, the annual incentive for (i) approximately 42% of the annual performance period (January 1, 2023 until May 31, 2023) was based on a 40% target of base salary and (ii) approximately 58% of the annual performance period (June 1, 2023 until December 31, 2023) was based on a 75% target of base salary, and the associated payouts for the annual performance period were prorated as set forth in the table above. The results of Mr. Ring’s incentive for the entire year were certified by the Knife River compensation committee. | | | | | | | | | | (2) | Adjusted EBITDA used in the incentive calculation is EBITDA, as reported, adjusted to exclude the effect of one-time Separation costs and transaction costs associated with acquisitions. In determining the 2023 annual incentive awards, the compensation committee approved adjustments to EBITDA of $9,961,975 for costs associated with the spin-off and $99,000 for costs related to acquisitions. | | | | | | | | |

  77. Trevor J. Hastings

    | Performance Period | | Performance Measure | Result ($) | Percent of Performance Measure Achieved (%) | Percent of Award Opportunity Payout (%) | Weight Applicable to the Performance Period (%) | Weighted Award Opportunity Payout % (%) | Proration Applicable to the Performance Period (%)(1) | Prorated Award Opportunity Payout % (%)(1) | | January 1, 2023 - May 31, 2023(2) | | WBI Energy, Inc. Adjusted Earnings from Continuing Operations(3) | 14,517 | 125.82 | 200.0 | 100 | 200.0 | 41.4 | 82.8 | | June 1, 2023 - December 31, 2023(4) | | Adjusted EBITDA(5) | 432,064 | 132.96 | 250.0 | 80 | 200.0 | 58.6 | 117.2 | | | | Knife River Separation Performance(6) | Achieved at Maximum | | 200.0 | 20 | 40.0 | 58.6 | 23.4 | | Total | | | | | | | | | 223.4 | | (1) | Mr. Hastings’ annual incentive performance periods are reflected in the table above and payouts were prorated based on his time of service (a) prior to the Separation as president and CEO of WBI Energy, Inc. from January 1, 2023 until May 31, 2023 and (b) following the Separation, as COO of Knife River from June 1, 2023 until December 31, 2023. Mr. Hastings was named COO of Knife River, effective upon the Separation, and his compensation was adjusted at such time such that on June 1, 2023 Mr. Hastings’ annual incentive target was increased in connection with the Separation pursuant to his offer letter. Accordingly, the annual incentive for (i) approximately 42% of the annual performance period (January 1, 2023 until May 31, 2023) was based on a 60% target of base salary and (ii) approximately 58% of the annual performance period (June 1, 2023 until December 31, 2023) was based on a 75% target of base salary, and the associated payouts for the annual performance period were prorated as set forth in the table above. In addition, Mr. Hastings was awarded a $100,000 discretionary bonus for work associated with the Strategic Review of MDU Construction Services Group, Inc. | | | | | | | | | | (2) | For the January 1, 2023 to May 31, 2023 pre-Separation performance period, the MDU Resources Compensation Committee certified the results and determined the payout for the performance measure during that period. | | | | | | | | | | (3) | WBI Energy, Inc. Adjusted Earnings from Continuing Operations was adjusted by the MDU Resources Compensation Committee to remove transaction costs associated with the spin-off and strategic review. Earnings were adjusted by $112,000 of unamortized debt issuance costs, which were written off as part of the spin-off and strategic review. | | | | | | | | | | (4) | For the June 1, 2023 to December 31, 2023 performance period, the Knife River compensation committee certified the results and determined the payout for the performance measure during that period. | | | | | | | | | | (5) | Adjusted EBITDA used in the incentive calculation is EBITDA, as reported, adjusted to exclude the effect of one-time Separation costs and transaction costs associated with acquisitions. In determining the 2023 annual incentive awards, the compensation committee approved adjustments to EBITDA of $9,961,975 for costs associated with the spin-off and $99,000 for costs related to acquisitions. | | | | | | | | | | (6) | For the June 1, 2023 to December 31, 2023 performance period, the Knife River compensation committee included the Knife River Separation Performance measure as an annual incentive award performance measure for Mr. Hastings due to his contributions and role in supporting completion of the work associated with the spin-off of Knife River as a separate public company. | | | | | | | | |

  78. Karl A. Liepitz

    | Performance Period | | Performance Measure | Result ($) | Percent of Performance Measure Achieved (%) | Percent of Award Opportunity Payout (%) | Weight Applicable to the Performance Period (%) | Weighted Award Opportunity Payout % (%) | Proration Applicable to the Performance Period (%)(1) | Prorated Award Opportunity Payout % (%)(1) | | January 1, 2023 - May 31, 2023(2) | | Combined Adjusted Plan Earnings of MDU Resources Business Units(4) | 113,086 | 111.71 | 178.1 | 60 | 106.8 | 41.4 | 44.2 | | | | Knife River Separation Performance | Achieved at Maximum | | 200.0 | 20 | 40.0 | 41.4 | 16.6 | | | | Completion of MDU Construction Services Group, Inc. Strategic Review | Achieved at Target | | 100.0 | 20 | 20.0 | 41.4 | 8.3 | | June 1, 2023 - December 31, 2023(3) | | Adjusted EBITDA(5) | 432,064 | 132.96 | 250.0 | 80 | 200.0 | 58.6 | 117.2 | | | | Knife River Separation Performance | Achieved at Maximum | | 200.0 | 20 | 40.0 | 58.6 | 23.4 | | Total | | | | | | | | | 209.7 | | (1) | Mr. Liepitz’s annual incentive performance periods are reflected in the table above and payouts were prorated based on his time of service (a) prior to the Separation as vice president, general counsel and secretary of MDU Resources from January 1, 2023 until May 31, 2023 and (b) following the Separation, as CLO of Knife River from June 1, 2023 until December 31, 2023. Mr. Liepitz was named CLO of Knife River, effective upon the Separation, but his compensation, including his annual incentive target, was not adjusted in connection with the Separation pursuant to his offer letter. Accordingly, the annual incentive for (i) approximately 42% of the annual performance period (January 1, 2023 until May 31, 2023) and (ii) approximately 58% of the annual performance period (June 1, 2023 until December 31, 2023) was, in each case, based on a 75% target of base salary, and the associated payouts for the annual performance period were prorated as set forth in the table above. | | | | | | | | | | (2) | For the January 1, 2023 to May 31, 2023 pre-Separation performance period, the MDU Resources Compensation Committee certified the results and determined the payout for the performance measure during that period. | | | | | | | | | | (3) | For the June 1, 2023 to December 31, 2023 performance period, the Knife River compensation committee certified the results and determined the payout for the performance measure during that period. | | | | | | | | | | (4) | Combined Adjusted Plan Earnings of MDU Resources Business Units was adjusted by the MDU Resources Compensation Committee to remove transactions costs associated with the Separation. MDU Resources earnings were adjusted by $1.46 million of unamortized debt issuance costs, which were written off as part of the spin-off and strategic review. | | | | | | | | | | (5) | Adjusted EBITDA used in the incentive calculation is EBITDA, as reported, adjusted to exclude the effect of one-time Separation costs and transaction costs associated with acquisitions. In determining the 2023 annual incentive awards, the compensation committee approved adjustments to EBITDA of $9,961,975 for costs associated with the spin-off and $99,000 for costs related to acquisitions. | | | | | | | | |

  79. Nancy K. Christenson

    | Performance Period | | Performance Measure | Result ($) | Percent of Performance Measure Achieved (%) | Percent of Award Opportunity Payout (%) | Weight Applicable to the Performance Period (%) | Weighted Award Opportunity Payout % (%) | Proration Applicable to the Performance Period (%)(1) | Prorated Award Opportunity Payout % (%)(1) | | January 1, 2023 - May 31, 2023 | | Adjusted EBITDA(2) | 432,064 | 132.96 | 250.0 | 100 | 250.0 | 41.7 | 104.2 | | June 1, 2023 - December 31, 2023 | | Adjusted EBITDA(2) | 432,064 | 132.96 | 250.0 | 100 | 250.0 | 58.3 | 145.8 | | Total | | | | | | | | | 250.0 | | (1) | Ms. Christenson’s annual incentive performance period is reflected in the table above and payouts were prorated based on her time of service (a) prior to the Separation from January 1, 2023 until May 31, 2023 and (b) following the Separation from June 1, 2023 until December 31, 2023. Ms. Christenson was named vice president of administration of Knife River, effective upon the Separation, and her compensation was adjusted such that on June 1, 2023. Ms. Christenson’s annual incentive target was increased in connection with the Separation pursuant to her offer letter. However, despite the increase to Ms. Christenson’s annual incentive target in connection with the Separation, the performance measure was only measured from January 1, 2023 until December 31, 2023, while the associated payouts for the 2023 performance period were prorated as set forth below. Accordingly, the annual incentive for (i) approximately 42% of the annual performance period (January 1, 2023 until May 31, 2023) was based on a 40% target of base salary and (ii) approximately 58% of the annual performance period (June 1, 2023 until December 31, 2023) was based on a 60% target of base salary, and the associated payouts for the annual performance period were prorated as set forth in the table above. The results of Ms. Christenson’s incentive for the entire year were certified by the Knife River compensation committee. | | | | | | | | | | (2) | Adjusted EBITDA used in the incentive calculation is EBITDA, as reported, adjusted to exclude the effect of one-time Separation costs and transaction costs associated with acquisitions. In determining the 2023 annual incentive awards, the compensation committee approved adjustments to EBITDA of $9,961,975 for costs associated with the spin-off and $99,000 for costs related to acquisitions. | | | | | | | | |

  80. Nancy K. Christenson

    The compensation committee, or the MDU Resources Compensation Committee, as applicable, further assessed management’s progress toward completing the performance measures related to the DEI initiatives for the named executive officers to whom the DEI modifier applied. For the period January 1, 2023 until May 31, 2023, the MDU Resources Compensation Committee, and for the period June 1, 2023 until December 31, 2023, the compensation committee certified the following: •The further expansion of the succession planning process beyond the executive officer positions at the corporate level including operating company presidents and certain other senior members along with the identification of candidate diversity in terms of gender, ethnicity, individuals with disabilities and veteran status. •Employee training on fostering a culture of diversity and inclusion was completed. •An increase of over ten percent in diversity outreach efforts was achieved aimed at attracting diverse candidates to positions within the company. A human resources information system was implemented to provide a single source and efficiencies in gathering and maintaining employment metrics including diversity of the workforce. Based on these accomplishments the compensation committee, or the MDU Resources Compensation Committee, as applicable, awarded a DEI modifier of 5.0% of the executive’s target annual incentive to whom the DEI modifier applied, subject to applicable proration for 2023. Based on the achievement of the performance targets and the DEI modifiers (for whom the DEI modifier applied), the named executive officers received the following 2023 annual incentive compensation:

  81. Nancy K. Christenson

    | Name | | Performance Period | Target Incentive ($) | Weighted Payout (%) | Payout ($) | DEI Modifier (%)(1) | DEI Payout ($) | Total Amount ($) | | Brian R. Gray | | January 1, 2023 - February 28, 2023 | 40,000 | 250.0 | 100,000 | N/A | — | 100,000 | | | | March 1, 2023 - May 31, 2023 | 93,750 | 240.0 | 225,000 | 5.0 | 4,688 | 229,688 | | | | June 1, 2023 - December 31, 2023 | 536,667 | 240.0 | 1,288,000 | 5.0 | 26,833 | 1,314,833 | | | | | | | | | | 1,644,521 | | Nathan W. Ring | | January 1, 2023 - May 31, 2023 | 52,763 | 250.0 | 131,908 | N/A | — | 131,908 | | | | June 1, 2023 - December 31, 2023 | 196,875 | 250.0 | 492,188 | N/A | — | 492,188 | | | | | | | | | | 624,096 | | Trevor J. Hastings | | January 1, 2023 - May 31, 2023 | 104,252 | 200.0 | 208,504 | 5.0 | 5,213 | 213,717 | | | | June 1, 2023 - December 31, 2023 | 219,863 | 240.0 | 527,671 | 5.0 | 10,993 | 538,664 | | | | | | | | | | 752,381 | | Karl A. Liepitz | | January 1, 2023 - May 31, 2023 | 145,829 | 166.8 | 243,243 | 5.0 | 7,291 | 250,534 | | | | June 1, 2023 - December 31, 2023 | 206,671 | 240.0 | 496,011 | 5.0 | 10,334 | 506,345 | | | | | | | | | | 756,879 | | Nancy K. Christenson | | January 1, 2023 - May 31, 2023 | 48,767 | 250.0 | 121,917 | N/A | — | 121,917 | | | | June 1, 2023 - December 31, 2023 | 122,500 | 250.0 | 306,250 | N/A | — | 306,250 | | | | | | | | | | 428,167 | | (1) | The DEI modifier was included as part of the annual incentive for the CEO, COO and CLO. A DEI modifier did not apply to the CEO until his promotion to CEO on March 1, 2023 and only applied with respect to Knife River. As such, only the CEO’s annual incentive target for the performance period from March 1, 2023 until December 31, 2023 was subject to the Knife River DEI modifier. With respect to the COO and CLO, given their respective roles with MDU Resources at the time, a DEI modifier was associated with MDU Resources (and not Knife River) for the period of time from January 1, 2023 until May 31, 2023. Following the Separation, a DEI modifier applied to the COO and CLO with respect to Knife River only. Accordingly, the MDU Resources Compensation Committee awarded an MDU Resources DEI modifier award of 5.0% for the COO and CLO for the pre-Separation performance period, while the compensation committee awarded a Knife River DEI modifier award of 5.0% for the COO and CLO for the post-Separation performance period. | | | | | | | |

  82. Long-Term Incentives

    Long-Term Incentives As discussed in more detail below, all of our named executive officers participated in the 2023 MDU Resources long-term incentive plan for the period of time prior to the Separation, and the 2023 Knife River long-term incentive plan for the period of time following the Separation, which, for 2023, consisted of time-based restricted stock units that incentivize retention of our executives and alignment with the interests of our stockholders. Long-term incentive compensation comprised 63.6% of the CEO’s 2023 total target compensation and 45.9% of the average of the other named executive officer’s total target compensation. Stock earned under long-term incentive compensation is subject to our stock retention requirements.

  83. Grant of 2023-2025 MDU Resources Long-Term Equity Incentive Awards

    Grant of 2023-2025 MDU Resources Long-Term Equity Incentive Awards Prior to the Separation, MDU Resources made its annual long-term equity incentive awards to our named executive officers under its long-term incentive plan. In 2023, MDU Resources awarded only time-based restricted stock units and did not award performance shares as had historically been the practice due in part to, according to MDU Resources, as a means of retention for executive officers of both entities during the then pending Separation. On February 15, 2023, the MDU Resources Compensation Committee determined the number of MDU Resources time-based restricted stock units to be granted to each named executive officer for the 2023-2025 vesting period by dividing the executive’s long-term award amount in effect at such time by the average of the closing prices of MDU Resources’ stock from January 1 through January 22, 2023, which was $30.42 per share. Based on this price, the MDU Resources Compensation Committee awarded the MDU Resources time-based restricted stock units as shown below:

  84. Grant of 2023-2025 MDU Resources Long-Term Equity Incentive Awards

    | Name | Base Salary in Effect on February 16, 2023 ($) | Long-Term Incentive of Base Salary in Effect on February 16, 2023 (%) | Long-Term Incentive in Effect on February 16, 2023 ($) | MDU Resources Time-Based Restricted Stock Units (#) | | Brian R. Gray | 400,000 | 194 | 775,000 | 25,476 | | Nathan W. Ring | 316,580 | 55 | 174,119 | 5,723 | | Trevor J. Hastings | 420,000 | 100 | 420,000 | 13,806 | | Karl A. Liepitz | 470,000 | 170 | 799,000 | 26,265 | | Nancy K. Christenson | 292,600 | 55 | 160,930 | 5,290 |

  85. Conversion of MDU Resources Outstanding Long-Term Equity Incentive Awards

    Conversion of MDU Resources Outstanding Long-Term Equity Incentive Awards Immediately prior to the Separation, our named executive officers held unvested MDU Resources performance shares and time-based restricted stock units. MDU Resources equity-based awards that were outstanding immediately prior to the Separation and held by named executive officers were treated as follows: •Restricted stock units: At the effective time of the Separation, each award of MDU Resources restricted stock units held by a named executive officer was converted into an award of restricted stock units with respect to Knife River common stock and the number of shares subject to each such award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original MDU Resources award as measured immediately before and immediately after the Separation, subject to rounding. •Performance share awards: Effective as of immediately prior to the Separation, the MDU Resources Board determined the level of performance for each completed fiscal year(s) within the applicable performance period based on actual performance results, and the performance level for each incomplete fiscal year within the applicable performance period was deemed to have been achieved at the target level. Specifically, the MDU Resources Compensation Committee determined that the MDU Resources performance shares awarded in (i) February 2021 for the 2021-2023 performance period were earned at a composite payout of 68%, comprised of two-thirds at 52% of target based on results as of December 31, 2022 and one-third at 100% of target for 2023, and (ii) February 2022 for the 2022-2024 performance period were earned at 91.3% of target, comprised of one-third at 74% of target based on the results as of December 31, 2022 and two-thirds at 100% of target for 2023 and 2024. Then, at the effective time of the Separation, each award of MDU Resources performance shares held by a named executive officer was converted into an award of restricted stock units with respect to Knife River common stock and the number of shares of Knife River common stock subject to each such award was adjusted in a manner intended to preserve the aggregate intrinsic value of the original MDU Resources award (taking into account the determination of performance as of immediately prior to the Separation) as measured immediately before and immediately after the Separation, subject to rounding. Knife River awards received for converted MDU Resources awards became subject to the terms of our LTIP. Prior service with MDU Resources is recognized for vesting purposes of Knife River awards. For details on the Knife River awards that our named executive officers received for their MDU Resources awards, please see the “Grants of Plan-Based Awards in 2023,” “Outstanding Equity Awards at Fiscal Year-End 2023” and “Option Exercises and Stock Vested During 2023” tables in the “Executive Compensation Tables” section of this Proxy Statement.

  86. Grant of 2023-2025 Knife River Long-Term Equity Incentive Awards

    Grant of 2023-2025 Knife River Long-Term Equity Incentive Awards As contemplated by the offer letters that the named executive officers entered into with us in connection with the Separation, the compensation committee approved additional grants of Knife River time-based restricted stock units in July 2023 following the Separation because the value of the MDU Resources time-based restricted stock unit awards granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023 only represented a portion of the total value for the 2023 long-term equity-based incentive award grants set forth in the applicable offer letters, other than with respect to the CLO, for whom the total long-term equity-based incentive award amount contemplated by his offer letter was granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023. Accordingly, on July 12, 2023, the compensation committee determined the number of incremental Knife River time-based restricted stock units to be granted to each named executive officer for the 2023-2025 vesting period by subtracting the value of the MDU Resources time-based restricted stock unit awards granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023 as of such grant date from the long-term equity-based incentive award amount set forth in the applicable offer letters and then dividing such incremental long-term award amount in effect at such time by the average of the closing prices of Knife River’s common stock on the last 10 trading days of June 2023, which was $45.60 per share. Based on this price, the compensation committee awarded the Knife River time-based restricted stock units as shown below:

  87. Grant of 2023-2025 Knife River Long-Term Equity Incentive Awards

    | Name | | Base Salary in Effect on July 12, 2023 ($) | Long-Term Incentive of Base Salary in Effect on July 12, 2023 (%) | Long-Term Incentive in Effect on July 12, 2023 ($) | Post-Spin Converted Knife River Time-Based Restricted Stock Units (#) | Incremental Knife River Time-Based Restricted Stock Units awarded July 12, 2023 (#) | Total Post-Spin Knife River Time-Based Restricted Stock Units (#) | | Brian R. Gray(1) | | 800,000 | 375 | 2,676,389 | 21,227 | 41,696 | 62,923 | | Nathan W. Ring | | 450,000 | 150 | 675,000 | 4,768 | 10,983 | 15,751 | | Trevor J. Hastings | | 500,000 | 150 | 750,000 | 11,503 | 7,236 | 18,739 | | Karl A. Liepitz(2) | | 470,000 | 170 | 799,000 | 21,885 | — | 21,885 | | Nancy K. Christenson | | 350,000 | 100 | 350,000 | 4,407 | 4,146 | 8,553 | | (1) | The long-term incentive for Mr. Gray was prorated based on his salary and long-term incentive target percentages for applicable time periods during 2023. | | | | | | | | (2) | Mr. Liepitz did not receive an incremental Knife-River time-based restricted stock unit grant because the total long-term equity-based incentive award amount contemplated by his offer letter was granted by the MDU Resources Compensation Committee and the MDU Resources Board in February 2023. | | | | | | |

  88. Grant of 2023-2025 Knife River Long-Term Equity Incentive Awards

    The restricted stock units enhance alignment with stockholders and serve as a retention tool. The time-based restricted stock units (including the MDU Resources time-based restricted stock units that were converted into Knife River time-based restricted stock units in connection with the Separation) granted in 2023 will vest at the end of 2025, as long as the executive remains continuously employed with the company. The time-based restricted stock units are designed to incentivize retention of our executives and alignment with the interests of our stockholders.

  89. 2024 Annual and Long-Term Incentive Preview

    2024 Annual and Long-Term Incentive Preview The compensation committee continues to evaluate annual and long-term incentive plan design to ensure proper alignment with our commitment to performance-based incentives.The following is a preview of the annual and long-term incentive structure that has been put in place by the compensation committee starting in 2024. The 2024 annual incentive plan is designed to tie performance to Adjusted EBITDA as well as a safety performance measure. The Adjusted EBITDA measure will represent 90% of target with the safety measure representing 10% of target. The financial measure will align with the company’s EDGE initiatives. The EDGE acronym stands for EBITDA margin improvement, Discipline, Growth and Excellence and is the company’s strategic initiative to improve margins and to execute on other strategic initiatives aimed at generating long-term profitable growth. Our named executive officers were awarded long-term incentive awards comprised of 35% time-based restricted stock unit awards and 65% performance share awards for the 2024-2026 performance period. The performance share award performance measures are tied to long-term shareholder value and based upon relative total shareholder return and achieving certain margin improvement measures. The compensation committee will continue to review and refine the executive compensation program, including our compensation philosophy and incentive programs, in order to support appropriate alignment between pay and performance.

  90. Impact of Tax and Accounting Treatment

    Impact of Tax and Accounting Treatment The compensation committee may consider the impact of tax or accounting treatment in determining compensation. The compensation committee did not make any adjustments to the 2023 compensation program to address the impact of tax or accounting treatment. The compensation committee may also consider the accounting and cash flow implications of various forms of executive compensation. We expense salaries and annual incentive compensation as earned. For our equity awards, we record the accounting expense in accordance with Accounting Standards Codification Topic 718, which is generally expensed over the vesting period.

  91. Incentive Award Clawback Policy

    Incentive Award Clawback Policy The board has adopted the Incentive Compensation Recovery Policy, effective as of October 2, 2023, in accordance with Rule 10D-1 of the Exchange Act and the corresponding NYSE listing standards. The policy applies to our current and former executive officers as defined in Rule 10D-1, including the named executive officers and will be administered by the compensation committee. In the event we are required to prepare an accounting restatement to correct a material noncompliance with any financial reporting requirement under the securities laws, including restatements that correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the policy provides for the recovery of erroneously awarded incentive-based compensation received by executive officers on or after the policy’s effective date. The recovery of such compensation applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the requirement for a restatement.

  92. Summary Compensation Table for 2023

    Summary Compensation Table for 2023

  93. Summary Compensation Table for 2023

    | Name and Principal Position (a) | | Year (b) | Salary ($) (c) | Bonus ($) (d)(1) | Stock Awards ($) (e)(2) | Non-Equity Incentive Plan Compensation ($) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)(3) | All Other Compensation ($) (i)(4) | Total ($) (j) | | Brian R. Gray President and Chief Executive Officer (CEO) | | 2023 | 658,334 | — | 2,620,279 | 1,644,521 | — | 68,348 | 4,991,482 | | | | 2022 | 359,341 | — | — | 332,717 | — | 72,308 | 764,366 | | Nathan W. Ring Vice President and Chief Financial Officer (CFO) | | 2023 | 394,408 | — | 661,819 | 624,096 | — | 58,829 | 1,739,152 | | | | 2022 | 302,952 | — | 169,102 | 95,127 | — | 63,077 | 630,258 | | Trevor J. Hastings Vice President and Chief Operating Officer (COO) | | 2023 | 466,904 | 100,000 | 768,210 | 752,381 | 58,062 | 82,322 | 2,227,879 | | | | 2022 | 400,000 | — | 405,956 | 36,720 | — | 97,478 | 940,154 | | Karl A. Liepitz Vice President, Chief Legal Officer and Secretary (CLO) | | 2023 | 470,000 | — | 867,663 | 756,879 | 8,525 | 82,428 | 2,185,495 | | | | 2022 | 440,000 | — | 714,491 | 187,110 | — | 100,604 | 1,442,205 | | Nancy K. Christenson Vice President of Administration | | 2023 | 326,084 | — | 353,418 | 428,167 | 5,280 | 75,215 | 1,188,164 | | | | 2022 | 280,000 | — | 156,301 | 87,920 | 17,630 | 80,378 | 622,229 | | (1) | In July 2023, the MDU Resources Compensation Committee awarded Mr. Hastings a $100,000 discretionary bonus for his work on a strategic review of MDU Construction Services Group, Inc. | | | | | | | | | | (2) | Amounts in this column represent the aggregate grant date fair value of the stock awards granted to our named executive officers by MDU Resources prior to the Separation, the incremental increase in fair value associated with the conversion of MDU Resources awards to Knife River restricted stock units, and the Knife River restricted stock unit awards granted after the Separation. The grant date fair value is calculated in accordance with generally accepted accounting principles for stock-based compensation in Accounting Standards Codification Topic 718 and as described in Note 12 of our audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. See “Compensation Discussion and Analysis” for a description of the treatment of the outstanding MDU Resources performance shares and restricted stock units at the time of Separation. The following table separates the grant date fair value of the stock awards granted by MDU Resources during 2023 and the incremental increase in fair value attributable to the conversion of such stock awards at Separation. | | | | | | | | | | | Name | | Grant Date Fair Value of MDU Resources Stock Awards ($) | | | | Incremental Increase in Fair Value of Stock Awards at Separation ($) | | | | | Brian R. Gray | | 793,832 | | | | 33,519 | | | | | Nathan W. Ring | | 178,329 | | | | 11,221 | | | | | Trevor J. Hastings | | 430,195 | | | | 26,867 | | | | | Karl A. Liepitz | | 818,417 | | | | 49,245 | | | | | Nancy K. Christenson | | 164,836 | | | | 10,304 | | |

  94. Summary Compensation Table for 2023

    | (3) Amounts shown for 2023 represent the change in the actuarial present value for the named executive officers’ accumulated benefits under the pension plan and SISP. There were no above-market earnings on deferred compensation in 2023. | | | | | | | | Name | | Accumulated Pension Change ($) | | | Above Market Earnings ($) | | | Brian R. Gray | | — | | | — | | | Nathan W. Ring | | — | | | — | | | Trevor J. Hastings | | 58,062 | | | — | | | Karl A. Liepitz | | 8,525 | | | — | | | Nancy K. Christenson | | 5,280 | | | — | | | (4) All Other Compensation for 2023 is comprised of: | | | | | | | | Name | 401(k) Plan ($)(a) | | Nonqualified Deferred Compensation Plan ($)(b) | Life Insurance Premium ($) | Matching Charitable Contributions ($) | Total ($) | | Brian R. Gray | 26,400 | | 40,000 | 748 | 1,200 | 68,348 | | Nathan W. Ring | 26,400 | | 31,658 | 611 | 160 | 58,829 | | Trevor J. Hastings | 39,600 | | 42,000 | 722 | — | 82,322 | | Karl A. Liepitz | 33,000 | | 47,000 | 728 | 1,700 | 82,428 | | Nancy K. Christenson | 43,500 | | 29,260 | 505 | 1,950 | 75,215 |

  95. Summary Compensation Table for 2023

    | (a) Represents MDU Resources and Knife River contributions to the 401(k) plan, which includes matching contributions and retirement contributions associated with the frozen pension plan as of December 31, 2009. | | (b) Represents MDU Resources contribution amounts to the DCP, which are approved by the compensation committee. For further information, see the section entitled “Nonqualified Deferred Compensation for 2023.” |

  96. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023

  97. Grants of Plan-Based Awards in 2023

    | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | Grant Date Fair Value of Stock and Option Awards ($) (l) | | Name (a) | | Grant Date (b) | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | | | | Brian R. Gray | | 2/16/2023(1) | 167,604 | 670,417 | 1,644,521 | | | | | | 2/16/2023(2) | | | | 21,227 | 793,832 | | | | 6/1/2023(3) | | | | | 33,519 | | | | 7/12/2023(4) | | | | 41,696 | 1,792,928 | | Nathan W. Ring | | 2/16/2023(1) | 62,410 | 249,638 | 624,096 | | | | | | 2/16/2023(2) | | | | 4,768 | 178,329 | | | | 6/1/2023(3) | | | | | 11,221 | | | | 7/12/2023(4) | | | | 10,983 | 472,269 | | Trevor J. Hastings | | 2/16/2023(1) | 81,029 | 324,115 | 752,381 | | | | | | 2/16/2023(2) | | | | 11,503 | 430,195 | | | | 6/1/2023(3) | | | | | 26,867 | | | | 7/12/2023(4) | | | | 7,236 | 311,148 | | Karl A. Liepitz | | 2/16/2023(1) | 109,999 | 352,500 | 804,875 | | | | | | 2/16/2023(2) | | | | 21,885 | 818,417 | | | | 6/1/2023(3) | | | | | 49,245 | | Nancy K. Christenson | | 2/16/2023(1) | 42,817 | 171,267 | 428,167 | | | | | | 2/16/2023(2) | | | | 4,407 | 164,836 | | | | 6/1/2023(3) | | | | | 10,304 | | | | 7/12/2023(4) | | | | 4,146 | 178,278 | | (1) | Amounts represent possible payouts under the annual incentive awards for 2023 granted pursuant to the MDU Resources and Knife River Corporation Executive Incentive Compensation Plans. | | | | | | | | (2) | Represents restricted stock units granted by MDU Resources as converted to Knife River restricted stock units in connection with the Separation. | | | | | | | | (3) | Amounts represent the incremental increase in fair value related to the conversion of all outstanding MDU Resources performance shares and restricted stock units to Knife River restricted stock units in connection with the Separation. | | | | | | | | (4) | Represents restricted stock units granted by Knife River after the Separation. | | | | | | |

  98. Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative Discussion Relating to the Summary Compensation Table and Grants of Plan-Based Awards Table

  99. Outstanding Equity Awards at Fiscal Year-End 2023

    Outstanding Equity Awards at Fiscal Year-End 2023 The following table sets forth information regarding restricted stock units that had not vested for each named executive officer as of December 31, 2023. All information presented in the table is on a post-conversion basis. See “Compensation Discussion and Analysis” for a description of the treatment of the outstanding MDU Resources performance shares and restricted stock units at the time of Separation.

  100. Outstanding Equity Awards at Fiscal Year-End 2023

    | | | Stock Awards | | | Name (a) | | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (g) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (h)(3) | | Brian R. Gray | | 62,923(2) | 4,164,244 | | Nathan W. Ring | | 4,258(1) | 281,794 | | Nathan W. Ring | | 15,751(2) | 1,042,401 | | Trevor J. Hastings | | 10,223(1) | 676,558 | | Trevor J. Hastings | | 18,739(2) | 1,240,147 | | Karl A. Liepitz | | 17,993(1) | 1,190,777 | | Karl A. Liepitz | | 21,885(2) | 1,448,349 | | Nancy K. Christenson | | 3,935(1) | 260,418 | | Nancy K. Christenson | | 8,553(2) | 566,038 | | (1) | Time-based restricted stock units, which will vest on December 31, 2024. | | | | (2) | Time-based restricted stock units, which will vest on December 31, 2025. | | | | (3) | Value based on the number of restricted stock units reflected in column (g) multiplied by $66.18, the year-end per share closing stock price for 2023. | | |

  101. Option Exercises and Stock Vested During 2023

    Option Exercises and Stock Vested During 2023

  102. Option Exercises and Stock Vested During 2023

    | | | Stock Awards | | | Name (a) | | Number of Shares Acquired on Vesting (#) (d)(1) | Value Realized on Vesting ($) (e)(2) | | Brian R. Gray | | — | — | | Nathan W. Ring | | 8,166 | 401,419 | | Trevor J. Hastings | | 19,653 | 949,655 | | Karl A. Liepitz | | 13,678 | 937,264 | | Nancy K. Christenson | | 7,328 | 360,846 | | (1) | Includes MDU Resources performance shares earned for the 2020-2022 performance period ended December 31, 2022, which were settled February 16, 2023. The number of shares reflects shares of MDU Resources common stock prior to the Separation. Also includes MDU Resources restricted stock units as converted to Knife River restricted stock units in connection with the Separation, which vested on December 31, 2023, and were settled on February 22, 2024. | | | | (2) | The value is based on (a) the MDU Resources performance shares earned on December 31, 2022 using the closing stock price of MDU Resources common stock on December 31, 2022 of $30.34 per share and the related dividend equivalents and (b) the Knife River restricted stock units that vested on December 31, 2023 using the closing price of Knife River common stock on December 31, 2023 of $66.18 per share and the related dividend equivalents. | | |

  103. Pension Benefits for 2023

    Pension Benefits for 2023

  104. Pension Benefits for 2023

    | Name (a) | | Plan Name (b)(1) | Number of Years Credited Service (#) (c)(2) | Present Value of Accumulated Benefit ($) (d) | | Brian R. Gray | | Pension | n/a | — | | | | SISP | n/a | — | | Nathan W. Ring | | Pension | n/a | — | | | | SISP | n/a | — | | Trevor J. Hastings | | Pension | 13 | 288,340 | | | | SISP | 10 | 364,378 | | Karl A. Liepitz | | Pension | 6 | 37,149 | | | | SISP | n/a | — | | Nancy K. Christenson | | Pension | 32 | 1,042,277 | | | | SISP | 10 | 812,537 | | (1) | Messrs. Gray and Ring do not participate in the pension plan or SISP. Mr. Hastings and Ms. Christenson participate in the KRC pension plan and the SISP. Mr. Liepitz is a vested term participant in the MDU Resources pension plan. | | | | | (2) | Years of credited service related to the pension plan reflects the years of participation in the plan as of December 31, 2009, when the pension plan was frozen. Years of credited service related to the SISP reflects the years toward full vesting of the benefit which is 10 years. | | | |

  105. Pension Benefits for 2023

    The amounts shown for the pension plan and SISP represent the actuarial present values of the executives’ accumulated benefits accrued as of December 31, 2023, calculated using: •a 4.74% discount rate for the SISP; •a 4.82% discount rate for the KRC and MDU Resources pension plans; •the Society of Actuaries Pri-2012 Total Dataset Mortality with Scale MP-2021 (post commencement only); and •no recognition of pre-retirement mortality. The actuary assumed a retirement age of 60 for the pension and SISP benefits and assumed retirement benefits commence at age 60 for the pension and age 65 for SISP benefits.

  106. Nonqualified Deferred Compensation for 2023

    Nonqualified Deferred Compensation for 2023

  107. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control The Potential Payments upon Termination or Change of Control Table shows the payments and benefits our named executive officers would receive in connection with a variety of employment termination scenarios or upon a change of control. The scenarios include: •Voluntary or Not for Cause Termination; •Death; •Disability; •Change of Control with Termination; and •Change of Control without Termination. For the named executive officers, the information assumes the terminations or the change of control occurred on December 29, 2023. The table excludes compensation and benefits our named executive officers would earn during their employment with us whether or not a termination or change of control event had occurred. The tables also do not include benefits under plans or arrangements generally available to all salaried employees and that do not discriminate in favor of the named executive officers, such as benefits under our qualified defined benefit pension plan (for employees hired before 2006), the MDU Resources pension plan, accrued vacation pay, continuation of health care benefits, and life insurance benefits. The tables also do not include deferred compensation under the Knife River Corporation Executive Incentive Compensation Plan, Knife River Corporation Nonqualified Defined Contribution Plan, or the Knife River Corporation Deferred Compensation Plan. These amounts are shown and explained in the “Nonqualified Deferred Compensation for 2023” table. This table does not include SISP or SISP death benefits. These are explained in the “Pension Benefits for 2023” table.

  108. Disability

    Disability We provide disability benefits to some of our salaried employees equal to 60% of their base salary, subject to a salary limit of $200,000 for officers and $100,000 for other salaried employees. For all eligible employees, disability payments continue until as follows:

  109. Disability

    | Age When Disabled | Benefits Payable | | Prior to age 60 | To age 65 | | Ages 60 to 64 | 60 months | | Ages 65-67 | To age 70 | | Age 68 and over | 24 months |

  110. Disability

    Disability benefits are reduced for amounts paid as retirement benefits which include pension and SISP benefits. The disability payments in the Potential Payments upon Termination or Change of Control Table 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. For Mr. Hastings, who participates in the KRC pension plan, and Mr. Liepitz who is a vested term in the MDU Resources pension plan, the amount represents the present value of the disability benefit after reduction for retirement benefits using a discount rate of 4.82% for the pension plans. Because Ms. Christenson’s retirement benefits are greater than the disability benefit, the amount shown is zero. For Messrs. Gray and Ring who do not participate in the pension plans, the amount represents the present value of the disability benefit without reduction for retirement benefits using the discount rate of 4.74%, which is considered a reasonable rate for purposes of the calculation.

  111. Potential Payments upon Termination or Change of Control Table

    Potential Payments upon Termination or Change of Control Table

  112. Potential Payments upon Termination or Change of Control Table

    | Executive Benefits and Payments upon Termination or Change of Control | Voluntary or Not for Cause Termination ($) | Death ($) | Disability ($) | Change of Control (With Termination) ($) | Change of Control (Without Termination) ($) | | Brian R. Gray | | | | | | | Compensation: | | | | | | | Restricted Stock Units | — | 1,417,213 | 1,417,213 | 4,202,318 | 4,202,318 | | Benefits and Perquisites: | | | | | | | Disability Benefits | — | — | 527,390 | — | — | | | — | 1,417,213 | 1,944,603 | 4,202,318 | 4,202,318 | | Nathan W. Ring | | | | | | | Compensation: | | | | | | | Restricted Stock Units | — | 549,002 | 549,002 | 1,341,383 | 1,341,383 | | Benefits and Perquisites: | | | | | | | Disability Benefits | — | — | 686,296 | — | — | | | — | 549,002 | 1,235,298 | 1,341,383 | 1,341,383 | | Trevor J. Hastings | | | | | | | Compensation: | | | | | | | Restricted Stock Units | — | 888,359 | 888,359 | 1,948,159 | 1,948,159 | | Benefits and Perquisites: | | | | | | | Disability Benefits | — | — | 459,489 | — | — | | | — | 888,359 | 1,347,848 | 1,948,159 | 1,948,159 | | Karl A. Liepitz | | | | | | | Compensation: | | | | | | | Restricted Stock Units | — | 1,313,681 | 1,313,681 | 2,689,209 | 2,689,209 | | Benefits and Perquisites: | | | | | | | Disability Benefits | — | — | 741,085 | — | — | | | — | 1,313,681 | 2,054,766 | 2,689,209 | 2,689,209 | | Nancy K. Christenson | | | | | | | Compensation: | | | | | | | Restricted Stock Units | 179,479 | 372,121 | 372,121 | 839,249 | 839,249 | | Benefits and Perquisites: | | | | | | | Disability Benefits | — | — | — | — | — | | | 179,479 | 372,121 | 372,121 | 839,249 | 839,249 |

  113. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing information regarding the Compensation Actually Paid (CAP), as defined by SEC rules, to our named executive officers and certain company financial performance. As permitted by SEC rules, we are providing such disclosure for only 2023, because we were not a reporting company pursuant to Section 13(a) or 15(d) of the Exchange Act prior to such year. The CAP amounts shown in the table below do not reflect the actual amount of compensation earned by or paid to our executives during the applicable year. Please refer to the “Compensation Discussion and Analysis” section in this Proxy Statement for a complete description of how executive compensation relates to company performance and how the compensation committee makes its decisions.

  114. Pay Versus Performance

    | | Summary Compensation Table Total Compensation for Principal Executive Officer (PEO) ($)(2) | Compensation Actually Paid to PEO ($)(3) | Average Summary Compensation Table Total Compensation for Non-PEO Named Executive Officers ($)(4) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(5) | Value of initial fixed $100 investment based on: | | Net Income (in thousands) ($)(8) | Company Selected Measure - Adjusted EBITDA (in thousands) ($)(9) | | Year(1) | | | | | Total Stockholder Return ($)(6) | Peer Group Total Stockholder Return ($)(7) | | | | 2023 | 4,991,482 | 6,535,447 | 1,835,172 | 2,665,370 | 188.98 | 120.11 | 182,872 | 432,421 |

  115. Pay Versus Performance

    (1)Our PEO for 2023 was Brian R. Gray. Our non-PEO named executive officers for 2023 were Nathan W. Ring, Trevor J. Hastings, Karl A. Liepitz and Nancy K. Christenson. (2)Represents Mr. Gray’s total compensation as shown in the Summary Compensation Table (SCT) for 2023. (3)To arrive at CAP for Mr. Gray, total compensation as reported in the SCT was adjusted for the following:

  116. Pay Versus Performance

    | | 2023 | | SCT Total Compensation for the PEO | 4,991,482 | | less: Reported Value of Stock Awards in the SCT(a) | 2,620,279 | | plus: Stock Award Adjustments(b) | 4,164,244 | | less: Change in Actuarial Present Value of Defined Benefit and Pension Plans as Reported in the SCT | — | | plus: Aggregate Service Cost and Prior Service Costs on Defined Benefit and Pension Plans | — | | CAP for the PEO | 6,535,447 |

  117. Pay Versus Performance

    (a)Equity compensation grant date and year-end fair value for time-based awards were determined by the closing stock price on the date of grant or year-end, as applicable. (b)Stock Award Adjustment in determining CAP is as follows (fair value of equity awards was determined using methodologies and assumptions developed in a manner materially consistent with those used to determine the grant date fair value of the awards):

  118. Pay Versus Performance

    | Year | Year-end Fair Value of Equity Awards Granted in the Year which are Unvested | Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year-over-Year Change in Fair Value of Equity Award Granted in Prior Years that Vested in the Year | Prior Year-end Fair Value of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or Other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | 4,164,244 | — | — | — | — | — | 4,164,244 |

  119. Pay Versus Performance

    (4)Represents the average total compensation of our non-PEO named executive officers as shown in the SCT for 2023. (5)To arrive at the Average CAP for our non-PEO named executive officers, total compensation as reported in the SCT was adjusted for the following:

  120. Pay Versus Performance

    | | 2023 | | Average of SCT Total Compensation for Non-PEO Named Executive Officers | 1,835,172 | | less: Reported Value of Stock Awards in the SCT(a) | 662,777 | | plus: Stock Award Adjustments(b) | 1,510,942 | | less: Change in Actuarial Present Value of Defined Benefit and Pension Plans as Reported in the SCT | 17,967 | | plus: Aggregate Service Cost and Prior Service Costs on Defined Benefit and Pension Plans | — | | Average CAP for the Non-PEO Named Executive Officers | 2,665,370 |

  121. Pay Versus Performance

    (a)Equity compensation grant date and year-end fair value for time-based awards were determined by the closing stock price on the date of grant or year-end, as applicable. (b)Stock Award Adjustments in determining CAP

  122. Pay Versus Performance

    | Year | Year-end Fair Value of Equity Awards Granted in the Year which are Unvested | Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years that are Unvested | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year-over-Year Change in Fair Value of Equity Award Granted in Prior Years that Vested in the Year | Prior Year-end Fair Value of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or Other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | 1,074,234 | 225,018 | — | 211,690 | — | — | 1,510,942 |

  123. Pay Versus Performance

    (6)Represents value of $100 invested in company stock on June 1, 2023 (the date we become a publicly traded company) assuming dividends are reinvested in company stock at the frequency paid. (7)Represents the value of $100 invested in the S&P 400 Materials Index on June 1, 2023 (the date we become a publicly traded company), which is used for the company’s stock performance graph in the 2023 Annual Report, assuming dividends are reinvested in the compensation peer group stock at the frequency paid. (8)Net income for periods prior to the Separation is attributable to MDU Resources’ construction materials and contracting services segment. (9)Adjusted EBITDA is a non-GAAP financial measure and is calculated by adding back income taxes; interest expense (net of interest income); depreciation, depletion and amortization expense; unrealized gains and losses on benefit plan investments; stock-based compensation; and one-time Separation costs to net income.

  124. Descriptions of the Information Presented in the Pay Versus Performance Table

    Descriptions of the Information Presented in the Pay Versus Performance Table We are providing the following graphics to illustrate the relationship between our PEO CAP and our non-PEO named executive officers’ CAP as a group and company performance, as set forth and described in and under the “Pay Versus Performance” table, including the company’s net income and Adjusted EBITDA and the company’s and peer group’s TSR during 2023, assuming $100 initial investment on June 1, 2023.