CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement ("Agreement") dated as of ________________, _____ is entered into by and between Black Hills Corporation ("Company") and ________________________ (“Employee”).

The Board of Directors of the Company ("Board") has determined that it is in the best interests of the Company and its shareholders to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control (as defined below). Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

2.         DEFINITIONS .  

“ AFFILIATE ” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations of the Exchange Act.

“ BENEFICIAL OWNER ” or “ BENEFICIAL OWNERSHIP ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act”

“ CAUSE ” means those events or conditions described in paragraph 9(a)(1) and (2) below.

" CHANGE IN CONTROL " shall mean any of the following events:

(a)   The acquisition in a transaction or series of transactions by any Person of Beneficial Ownership of thirty percent (30%) or more of the combined voting power of the then outstanding shares of common stock of the Company; provided, however, that for purposes of this Agreement, the following acquisitions will not constitute a Change in Control: (A) any acquisition by the Company; (B) any acquisition of common stock of the Company by an underwriter holding securities of the Company in connection with a public offering thereof; and (C) any acquisition by any Person pursuant to a transaction which complies with subsections (c) (i), (ii) and (iii), below;

(b)   Individuals who, as of December 31, 2004 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common shareholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest;

(c)   Consummation, following shareholder approval, of a reorganization, merger, or consolidation of the Company and/or its subsidiaries, or a sale or other disposition (whether by sale, taxable or non-taxable exchange, formation of a joint venture or otherwise) of fifty percent (50%) or more of the assets of the Company and/or its subsidiaries (each a “Business Combination”), unless, in each case, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who were beneficial owners of shares of the common stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more that fifty percent (50%) of the combined voting power of the then outstanding shares of the entity resulting from the Business Combination or any direct or indirect parent corporation thereof (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one (1) or more subsidiaries)(the “Successor Entity”); (ii) no Person (excluding any Successor entity or any employee benefit plan or related trust, of the Company or such Successor Entity) owns, directly or indirectly, thirty percent (30%) or more of the combined voting power of the then outstanding shares of common stock of the Successor Entity, except to the extent that such ownership existed prior to such Business Combination; and (iii) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination or any direct or indirect parent corporation thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such Business Combination; or

(d)   Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with subsections (c) (i), (ii), and (iii) above.

(e)   A Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Common Stock as a result of the acquisition of Common Stock by the Company which, by reducing the number of shares of Common Stock then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Common Stock by the Company, and after such stock acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Common Stock which increases the percentage of the then outstanding Common Stock Beneficially Owned by the Subject Person, then a Change in Control shall occur.

(f)   A Change in Control shall not be deemed to occur unless and until all regulatory approvals required in order to effectuate a Change in Control of the Company have been obtained and the transaction constituting the Change in Control has been consummated.

“ EXCHANGE ACT ” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.”

" GOOD REASON " means those events or conditions described in paragraph 9(c)(i) through (vi) below.

" NOTICE OF TERMINATION " shall mean a notice which indicates the specific termination provision in this Agreement, if any, relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provisions so indicated. Any purported termination by the Company or Employee shall be communicated by written notice of termination to the other.

“ OMNIBUS INCENTIVE COMPENSATION PLAN ” shall mean the incentive compensation plan known as the “Black Hills Corporation Omnibus Incentive Compensation Plan” as adopted on May 30, 2001, and as amended or replaced from time to time thereafter prior to the Effective Date.

" PENSION PLAN " is the Company's tax qualified defined benefit pension plan as amended and restated effective October 1, 1989, and as amended from time to time thereafter prior to the Effective Date.

“ PERSON ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

" PROTECTION PERIOD " shall mean the time period beginning on the Effective Date and which shall expire on the second anniversary of the Effective Date; provided, that the Protection Period shall in no event extend beyond the first day of the month following the month in which the Employee attains age 65, if Employee is an executive officer of the Company on the Effective Date.

“ RETIREMENT SAVINGS PLAN ” shall mean the Black Hills Corporation Retirement Savings Plan (401K) as amended and restated on June 1, 2000, and as further amended from time to time thereafter prior to the effective date.

" WELFARE BENEFITS " shall mean the Black Hills Corporation Medical and Dental Plan, the Black Hills Corporation Flexible Benefit Plan, and the Black Hills Corporation Employee Life and Long-Term Disability Plan, and the Short-Term Disability Plan, as the

plans and the terms and conditions thereof exist on the day prior to the Effective Date.

The Term of this Agreement shall commence on the date of execution and shall continue in effect until June 1, 2008. If no Change in Control shall have occurred during the Term, this Agreement shall expire. If a Change in Control occurs during the Term, this Agreement shall remain in effect for full performance according to its terms. Upon expiration of this Agreement, the Company, by action of its Board of Directors, may elect to renew or not renew this Agreement, or may offer to renew the Agreement subject to modifications of any term or condition, at its discretion. The Board of Directors may, in its discretion, terminate this Agreement prior to the expiration of the Term, in the event that Employee, for any reason, ceases to be employed with the Company in a position as an executive officer within the meaning of the Exchange Act.

Subject to the provisions of this Agreement, during the Protection Period the Company agrees to continue to employ the Employee and the Employee agrees to remain in the employ of the Company. During the Protection Period, the Employee shall be employed at a position substantially similar to Employee’s position prior to the Change in Control or in such other capacity as may be mutually agreed to in writing by the parties. Employee shall perform the duties, undertake the responsibilities and exercise the authority customarily performed, undertaken and exercised by persons situated in a similar capacity.

During the Protection Period, excluding periods of vacation and sick leave to which Employee is entitled, Employee agrees to devote full attention and time during usual business hours to the business and affairs of the Company to the extent necessary to discharge the responsibilities assigned to Employee hereunder. It is expressly understood and agreed that to the extent that any civic, charitable or industry-related activities have been conducted by Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of Employee’s responsibilities to the Company.

During the Protection Period, the Company agrees to pay or cause to be paid to employee Annual Compensation at a rate at least equal to the highest rate of the Employee’s Annual Compensation as in effect at any time within one year preceding the Effective Date, and as may be increased from time to time. Such Annual Compensation shall be payable in accordance with the Company's customary practices applicable to its officers and employees. For purposes of this Agreement, "Annual Compensation" shall mean all of the following compensation paid to the Employee by the Company during a calendar year: (a) amounts which are includable in the gross income of the Employee for federal income tax purposes, including base salary, targeted annual incentive bonus, targeted long-term incentive grants and awards; and (b) matching contributions or other benefits payable under the Retirement Savings Plan; but excluding restricted stock awards, performance units or stock options that become vested or exercisable pursuant to Article 15 (Change in Control) of the Omnibus Incentive Compensation Plan, in a calendar year.

During the Protection Period, the Company shall provide to the Employee the Welfare Benefits and the Pension Plan, including supplemental medical insurance, travel accident insurance, short-term disability, long-term disability or life insurance benefits, or other substantially similar employee welfare and pension benefits, but in no event on a basis less favorable in terms of benefit levels and coverage than the Welfare Benefits and the Pension Plan. In the event Employee is not a participant in the Welfare Benefits or the Pension Plan prior to a Change of Control, then Company shall have no obligation to provide the Welfare Benefits or the Pension Plan or other substantially similar employee welfare and pension benefits as provided in this paragraph.

During the Protection Period, the Company shall continue to provide to Employee (if Employee was a participant prior to the Change in Control) coverage and participation under the Pension Equalization Plan or a substantially similar supplemental retirement plan, but in no event on a basis less favorable in terms of benefit levels and coverage than the Pension Equalization Plan.

(a)   Fringe Benefits, Perquisites, Vacation and Sick Leave . During the Protection Period, Employee shall be entitled to all fringe benefits, perquisites, and paid-time-off generally made available by the Company to its Employees. Unless otherwise provided herein, the fringe benefits, perquisites, and paid-time-off provided to Employee shall be on the same basis and terms as other similarly situated employees of the Company, but in no event shall be less favorable than the most favorable fringe benefits, perquisites, or paid-time-off to Employee at any time within one year preceding the Effective Date, or if more favorable, at any time thereafter.

(b)   Expenses . Employee shall be entitled to receive prompt reimbursement of all expenses reasonably incurred by him in connection with the performance of his duties hereunder or for promoting, pursuing or otherwise furthering the business or interests of the Company.

(c)   Indemnity . If, at the time of a Change in Control, the Employee was covered by an Indemnity Agreement, and/or Directors’ and Officers’ Insurance (D & O) coverage, then the Indemnity Agreement and D & O coverage shall continue in full force and effect throughout the Protection Period, and beyond the Protection Period, with respect to claims arising out of acts or omissions of the Employee prior to a Change in Control. If, following a Change in Control, Company or a Successor Entity adopts substitute Indemnity Agreements, and/or D & O coverage, for employees having substantially the same authority, duties, and responsibilities as Employee, then Employee shall be entitled to receive the benefit of such protection with respect to claims arising from acts or omissions of Employee following a Change in Control.

During the Protection Period, Employee’s employment hereunder may be terminated under the following circumstances:

(a)   Cause . The Company may terminate Employee’s employment for "Cause." A termination of employment is for "Cause" if Employee (1) enters a guilty plea, pleads nolo contendre to, or is convicted of a felony offense that is demonstrably injurious to the Company; (2) intentionally engages in other conduct which is demonstrably injurious to the Company, monetarily or otherwise; or (3) fails, after reasonable request, to cooperate with the Company or governmental authorities in connection with a civil or criminal regulatory investigation or proceeding, or other civil litigation involving the Company; provided, however, that no termination of Employee’s employment shall be for Cause as set forth in clauses (2) or (3), above, unless (i) there shall have been delivered to Employee a copy of a written Notice of Termination, at least thirty (30) days in advance of the Termination Date, setting forth that Employee was guilty of the conduct set forth in such applicable clause and specifying the particulars thereof in detail; and (ii) Employee shall have been provided an opportunity to be heard by the Board (with the assistance of Employee’s counsel if Employee so desires). No act, nor failure to act, on Employee’s part shall be considered "intentional" unless he has acted, or failed to act, with an absence of good faith and without a reasonable belief that his action or failure to act was in the best interest of the Company. Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by Employee after a Notice of Termination is given to the Employee shall constitute Cause for purposes of this Agreement.

(b)   Disability . The Company may terminate Employee’s employment after having established Employee’s Disability. For purposes of this Agreement, "Disability" means a physical or mental infirmity because of which Employee is receiving benefits under the Company sponsored long-term disability plan in which the Employee participates. Employee shall be entitled to the compensation and benefits provided for under this Agreement for any period during Protection Period and prior to the establishment of Employee’s Disability, during which Employee is unable to work due to a physical or mental infirmity, and up to the date long-term disability benefits are actually paid. Notwithstanding anything contained in this Agreement to the contrary, and subject to applicable law and the provisions of the Company’s long-term disability policy, until the Termination Date specified in a Notice of Termination relating to Employee’s Disability, Employee shall be entitled to return to his position with the Company as set forth in this Agreement in which event no Disability of Employee will be deemed to have occurred.

(c)   Good Reason . During the Protection Period, the Employee may terminate his employment for "Good Reason." For purposes of this Agreement, "Good Reason" shall mean the occurrence after the Effective Date of any of the events or conditions described below:

(i)   A material reduction of the Employee’s authority, duties, or responsibilities from those in effect prior to the Effective Date, other than an insubstantial or inadvertent reduction that is remedied by the Company promptly after receipt of notice thereof given by Employee; provided that, any reduction in the foregoing resulting merely from the acquisition of the Company, or any Business Combination, by reason of which the Company thereafter exists as a subsidiary or division of another entity, shall not constitute Good Reason;

(ii)   A reduction in the Employee’s Annual Compensation as defined in Section 5, or any failure to pay the Employee any compensation or benefits to which he is entitled within seven (7) days of the date due;

(iii)   Any material breach by the Company of any provision of this Agreement, including, but not limited to, the Company's failure to provide the Employee Welfare and Pension Benefits and Pension Equalization Plan as set forth in Sections 6 and 7 above;

(iv)   The Company's requiring the Employee to be based outside a 50-mile radius from Employee’s usual and normal place of work prior to the Change in Control, except for reasonably required travel on the Company's business which is not substantially greater than such travel requirements prior to the Effective Date;

(v)   Any purported termination of the Employee’s employment for Cause by the Company which does not comply with the terms of Section 9(a) above; or

(vi)   The failure of the Company to obtain an agreement, satisfactory to the Employee, from any successor or assign of the Company to assume and agree to perform this Agreement, as contemplated in Section 14 hereof.

In order to effectuate a termination under this Section 9(c), the Employee shall promptly deliver written notice to the Company upon the occurrence of, and stating the grounds for Good Reason in support of termination. For purposes of determining the amount of any cash payment payable to the Employee in accordance with Section 10, any reduction in compensation or benefits that would constitute Good Reason hereunder shall be deemed not to have occurred.

Upon termination of Employee's employment, prior to the end of the Protection Period, Employee shall be entitled to the following benefits:

(a)   If Employee’s employment with the Company shall be terminated (i) by the Company for Cause or Disability, or (ii) by reason of Employee’s death, or (iii) by Employee without "Good Reason," the Company shall pay Employee all amounts earned or accrued through the Termination Date, but not paid as of the Termination Date, including all Annual Compensation, reimbursement for reasonable and necessary expenses incurred by Employee on behalf of the Company during the period ending on the Termination Date, together with accrued vacation pay, and paid time off (collectively "Accrued Compensation"). In addition to the foregoing, if the Employee’s employment is terminated by the Company for Disability or by reason of the Employee’s death, the Company shall pay to the Employee or his beneficiaries an amount equal to the "Pro Rata Bonus" (as hereinafter defined). For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to 100% of the target bonus that the Employee would have been eligible to receive for the Company's fiscal year in which the Employee's employment terminates, multiplied by a fraction, the numerator of which is the number of days in such fiscal year through the Termination Date and the denominator of which is 365.

(b)   If the Employee’s employment with the Company shall be terminated (other than by reason of death) (i) by the Company other than for Cause or Disability, or (ii) by Employee for Good Reason, Employee shall be entitled to the following:

(i)   The Company shall pay Employee all Accrued Compensation and a Pro Rata Bonus;

(ii)   The Company shall pay Employee, in lieu of any further compensation for periods subsequent to the Termination Date, a lump sum severance payment, in cash, in an amount equal to (w) two (2) times (x) the Employee’s average Severance Compensation for the most recent five tax