THE OUTSIDE DIRECTORS STOCK BASED COMPENSATION PLAN

Exhibit 10.23

THE OUTSIDE DIRECTORS

STOCK BASED COMPENSATION PLAN

(As amended and restated effective January 1, 2009)

The Outside Directors Stock Based Compensation Plan (“Plan”) is hereby amended and restated by Black Hills Corporation (“Company”) effective the 1 ^st day of January, 2009, except as otherwise noted herein. [NOTE: provision permitting reelections in 2008 is effective before January 1, 2009.]

This document is an amendment and restatement of the Plan which was adopted by the Company effective the 1 ^st day of January, 1997. The Plan was established to provide to Participants certain benefits in order to attract and retain competent and hardworking outside directors whose abilities, experience and judgment can contribute to the well-being of the Company and its shareholders and to further align the long-term interests of the outside directors with those of the shareholders by providing benefits based on Company common stock equivalents.

Under Section 11 of the Plan, the Company reserved the right to amend, modify, or discontinue the Plan provided only that any modification does not reduce accrued and unpaid benefits.

The purpose of this amendment and restatement is to incorporate Plan amendments adopted since 1997 and to bring the Plan into compliance with the requirements of Section 409A of the Internal Revenue Code and the final regulations thereunder effective January 1, 2009. The Plan has been operated in good faith compliance with the requirements of Section 409A of the Internal Revenue Code and the interim guidance issued thereunder during the period beginning January 1, 2005 and ending December 31, 2008. The Company does not intend to “grandfather” any benefits earned and vested under the Plan as of December 31, 2004. The amendment and restatement does not reduce any accrued and unpaid benefits.

Each Outside Director of the Company shall become a Participant in the Plan on the date he or she becomes an Outside Director and shall remain a Participant until his or her entire Account has been distributed. Notwithstanding the foregoing, no Company common stock equivalents shall be added to the Participant’s Account with respect to any Quarter Period beginning after the Participant ceases to be an Outside Director of the Company.

The Company shall establish an Account for each Participant. As of the last day of each Quarter Period ending after the Participant enters the Plan and on or before the Participant’s Benefit Payment Date, the Participant’s Account shall be credited with the Participant’s share of Company common stock equivalents, including fractional equivalents, for the Quarter Period, as determined in accordance with Section 4. If the Participant’s Benefit Payment Date occurs on a date other than the last day of a Quarter Period, the Participant’s Account shall be credited with the appropriate amount of Company common stock equivalents, if any, for the Quarter Period in which the Benefit Payment Date occurs. In addition, the Participant’s Account shall be adjusted, as appropriate, to reflect stock splits, cash dividends, stock dividends, merger, consolidation and similar circumstances affecting the Company common stock. Cash dividends will be added in the form of common stock equivalents.

a.         Additions to Accounts for periods prior to December 1, 2007 are under the Plan as in effect prior to January 1, 2009.

b.         For the Quarter Period December 1, 2007 through February 29, 2008, each Participant shall be entitled to a quarterly addition to their Account in the amount determined by dividing the sum of $11,333.33 by the market price of the Company common stock on February 29, 2008. For the Quarter Period beginning March 1, 2008, and for the remainder of the Plan year, and for each Plan year thereafter, each Participant shall be entitled to a quarterly addition to his or her Account in the amount of the number of Company common stock equivalents determined by dividing the sum of $12,500 by the market price of the Company common stock on the last day of the Quarter Period for each Quarter Period of the Plan Year that the Participant is eligible for benefits. If a Participant is not an Outside Director for the entire Quarter Period, then the Participant’s addition for the quarter should be prorated for the number of days that the Participant served as Outside Director.

a.         Each Participant who entered the Plan before 2009 and whose Benefit Payment Date is after December 31, 2008 may elect a new Benefit Payment Date on an election form to be filed with the Committee. Such Benefit Payment Date shall be the first day of the month beginning after the later of (1) the date the Participant Separates from Service and (2) the date the Participant attains a specified age, provided that such age is at least 60 and no greater than 70. The election must be made in writing no later than December 31, 2008 in accordance with procedures established by the Committee, and shall in no case cause payment to occur in the year in which such election is made. If such Participant fails to make an election by December 31, 2008, his prior election shall remain in effect, provided that such prior election is not inconsistent with the provisions of the Plan as in effect on January 1, 2009. If there is no prior election, or if the prior

election is inconsistent with the terms of the Plan as in effect on January 1, 2009, the “default” provisions of this Section shall apply.

Participants entering the Plan for the first time after December 31, 2008 may also elect a Benefit Payment Date. Such Benefit Payment Date shall be the first day of the month beginning after the later of (1) the date the Participant Separates from Service and (2) the date the Participant attains a specified age, provided that such age is at least 60 and no greater than 70. Any election must be made in writing no later than 30 days after the Participant enters the Plan in accordance with procedures established by the Committee, and shall in no case cause payment to occur in the year in which such election is made.. Such election will apply exclusively to quarterly additions made to the Participant’s Account after the election date and the benefit calculation in Section 4(b) will be prorated as if the Participant became an Outside Director on the date of election.

The Benefit Payment Date of a Participant who fails to elect a Benefit Payment Date in accordance with the above shall be the first day of the month beginning after the later of (1) the date the Participant Separates from Service and (2) the date the Participant attains age 60.

b.         At the same time and on the same election form described in Section 5a above, the Participant may elect to receive payment of the benefits represented in the Participant’s Account from the following choices:

A Participant who fails to elect a form of payment in accordance with the above shall receive payment in the form of a cash lump sum in accordance with subsection b(1).

c.         The Benefit Payment Date and the payment method, once elected, may only be changed by the Participant’s giving written notice to the Committee of the Participant’s election to change the Benefit Payment Date and payment method and filing such election to change with the Committee; provided, however, that such request shall be made at least one year before the Benefit Payment Date then in effect, shall not

become effective for at least one year after the date the request is made, and shall specify a new Benefit Payment Date that is at least five years after the Benefit Payment Date then in effect; and provided further still, that once payments have begun, the form of payment election shall be irrevocable.

A Participant who has elected to receive a lump sum may elect to receive payment in cash or in Company common stock. Such election shall be made in writing prior to the date payment is made in accordance with procedures established by the Committee. In the absence of an election, payment shall be made in cash.

d.         Notwithstanding any provision of this Plan to the contrary, if payment of a Key Employee’s Account is to be made on account of the Key Employee’s Separation from Service, payment to such Key Employee shall begin on the later of (1) the Benefit Payment Date or (2) the first day of the seventh month beginning after the Key Employee’s Separation from Service. If payment to a Key Employee is delayed beyond the Benefit Payment Date on account of the provisions of this paragraph, and if payment of the Account is to be made in installments, the first payment shall include a lump sum equal to the sum of the monthly installment payments that would have been made if payment had begun on the Benefit Payment Date.

If a Participant suffers an unforeseeable emergency, as defined herein, the Committee, in its sole discretion, may pay to the Participant that portion of his or her Account which the Committee determines is necessary to satisfy the emergency need, including any amounts necessary to pay any federal, state or local income taxes reasonably anticip