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Black Hills Corporation
2005 Omnibus Incentive Plan
Option Award Agreement
(Effective for awards granted on or after
December 10, 2007)
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Participant:
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____________
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Date of Grant:
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____________
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Number of Shares Covered by this
Option:
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____________
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Number of above Shares intended to
be
Incentive Stock Options ("ISOs")
within the meaning of Internal
Revenue
Code § 422:
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____________
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Number of above shares intended to
be
Nonqualified Stock Options
("NQSOs"):
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____________
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Option Price for each Share:
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____________
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Date of Expiration:
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____________
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This document constitutes part of the prospectus
covering securities that have been registered under the Securities
Act of 1933.
THIS AGREEMENT, effective as of the Date of Grant
set forth above, represents the grant of stock options by Black
Hills Corporation, a South Dakota corporation (the "Company") to
the Participant named above, pursuant to the provisions of the
Black Hills Corporation 2005 Omnibus Incentive Plan
("Plan").
All capitalized terms used herein shall have the
meanings ascribed to them in the Plan, unless specifically set
forth otherwise herein.
The Plan provides a complete description of the
terms and conditions governing the Option. If there is any
inconsistency between the terms of this Agreement and the terms of
the Plan, the Plan's terms shall completely supersede and replace
the conflicting terms of this Agreement. The parties hereto agree
as follows:
1.
Grant of Stock Options . The Company hereby grants to the Participant an Option to
purchase the number of Shares set forth above, at the stated Option
Price, which is 100 percent (100%) of the Fair Market Value of a
Share on the Date of Grant, in the manner and subject to the terms
and conditions of the Plan and this Agreement.
2.
Exercise of Stock Option . Except as hereinafter provided, the Participant may exercise
this Option at any time after the end of one year following the
Date of Grant as to those Shares which have become vested according
to the vesting schedule set forth below, provided that no exercise
may occur subsequent to the close of business on the Date of
Expiration (as defined on page 1 of this Agreement).
VESTING SCHEDULE
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Date
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Shares for Which Option Becomes
Exercisable
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Cumulative Number of Shares
Available for Purchase
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This
Option may be exercised in whole or in part, but not for less than
100 Shares at any one time, unless fewer than 100 Shares then
remain subject to the Option, and the Option is then being
exercised as to all such remaining Shares.
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3.
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Termination of Employment :
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(a)
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By death or Disability : In the event of termination of employment by reason of death
or disability, all Shares under this Option shall become
immediately vested (100%) and the Shares may be purchased under the
terms of this Agreement until the earlier of: (i) the expiration
date of this Option; or (ii) the first anniversary of the date of
death or Disability.
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(b)
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By Retirement : In the
event of termination of employment by reason of retirement, all
unvested Shares under this Option shall be forfeited and vested
Shares may be purchased under the terms of this Agreement until the
earlier of: (i) the expiration date of this Option; or (ii) the
third anniversary date of Retirement.
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(c)
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For other reasons :
Shares which are vested as of the date of termination of employment
of the Participant for any reason other than those reasons set
forth in 3(a) or 3(b) above may be purchased under the terms of
this Agreement until the earlier of: (i) the expiration date of
this Option; or (ii) 90 days following the date of termination of
employment. Shares which are not vested as of the date of
termination shall immediately terminate, and shall be forfeited to
the Company.
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4.
Change in Control . In
the event of a Change in Control, all Shares under this Option
shall become immediately vested (100%) and shall remain exercisable
for their entire term.
2
"Change
in Control" of the Company shall be deemed to have occurred (as of
a particular day, as specified by the Board) upon the occurrence of
any of the following events:
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(a)
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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;
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(b)
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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;
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(c)
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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
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