Exhibit 10.5

Black Hills Corporation
2015 Incentive Compensation Plan
Performance Share Award Agreement
(for Awards granted on or after April 28, 2015)

Performance Period January 1, ______ - December 31, ______

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Contents

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Article 1.
Performance Period
2
 
 
 
Article 2.
Value of Performance Shares
2
 
 
 
Article 3.
Performance Shares and Achievement of Performance Measure
2
 
 
 
Article 4.
Termination Provisions
3
 
 
 
Article 5.
Change in Control
3
 
 
 
Article 6.
Forfeiture and Repayment
5
 
 
 
Article 7.
Dividends
8
 
 
 
Article 8.
Form and Timing of Payment of Performance Shares
8
 
 
 
Article 9.
Nontransferability
8
 
 
 
Article 10.
Administration
8
 
 
 
Article 11.
Miscellaneous
9

        

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Black Hills Corporation
2015 Omnibus Incentive Plan
Performance Share Award Agreement

Performance Period January 1, _____ - December 31, ____
You have been selected to be a participant in the Black Hills Corporation 2015
Omnibus Incentive Plan (the “Plan”), as specified below:

Participant: ______________________

Target Performance Share Award: ______ shares

Performance Period: January 1, ____ to December 31, ____

Performance Measure: Total Shareholder Return (“TSR”).

Peer Index:

ALLETE Inc.
ALE
MGE Energy Inc.
MGEE
Alliant Energy Corp
LNT
OGE Energy Corp
OGE
Avista Corp
AVA
Piedmont Natural Gas
PNY
Cleco Corp
CNL
PNM Resources, Inc.
PNM
El Paso Electric Co.
EE
Portland General Electric Co.
POR
Great Plains Energy Inc.
GXP
Questar Corp
STR
IDACORP Inc.
IDA
Southwest Gas Corp
SWX
The Laclede Group, Inc.
LG
UIL Holdings Corp
UIL
MDU Resources Group Inc.
MDU
Vectren Corp
VVC
National Fuel Gas Co.
NFG
Westar Energy Inc.
WR
Northwest Natural Gas Co.
NWN
WGL Holdings Inc.
WGL
Northwestern Corp
NWE
 
 

THIS AGREEMENT (the “Agreement”) effective January 1, _____, represents the
grant of Performance Shares by Black Hills Corporation, a South Dakota
corporation (the “Company”), to the Participant named above, pursuant to the
provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing
the Performance Shares. 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.

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All capitalized terms shall have the meanings ascribed to them in the Plan,
unless specifically set forth otherwise herein.

The parties hereto agree as follows:

Article 1. Performance Period

The Performance Period commences on January 1, _____ and ends on December 31,
______.

Article 2. Value of Performance Shares

Each Performance Share shall represent and have a value equal to one share of
common stock of the Company.

Notwithstanding anything herein to the contrary, the Performance Shares shall
have no value whatsoever if the Ending Stock Price (as defined herein) is not at
least equal to 75 percent of the Beginning Stock Price (as defined herein),
taking into account any adjustments made pursuant to Paragraph 4.4 of the Plan.

Article 3. Performance Shares and Achievement of Performance Measure

(a)
The number of Performance Shares to be earned under this Agreement shall be
based upon the achievement of pre-established TSR performance goals as set by
the Compensation Committee of the Board of Directors (the “Committee”) for the
Performance Period, based on the following chart:

TSR Performance Relative to Companies in Peer Index
Payout
(% of Target)
 
 
85th Percentile or Above
200%
80th Percentile
175%
70th Percentile
150%
60th Percentile
125%
50th Percentile
100%
40th Percentile
75%
30th Percentile
50%
Below the 30th Percentile
0%

Interpolation shall be used to determine the percentile rank in the event the
Company’s Percentile Rank does not fall directly on one of the ranks listed in
the above chart.
    
For this purpose, Total Shareholder Return shall be determined as follows:

Total Shareholder
Return
=
Change in Stock Price + Dividends Paid
Beginning Stock Price

    

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Beginning Stock Price shall mean the average closing price on the applicable
stock exchange of one share of stock for the twenty (20) trading days
immediately prior to the first day of the Performance Period; Ending Stock Price
shall mean the average closing price on the applicable stock exchange of one
share of stock for the last twenty (20) trading days of the Performance Period;
Change in Stock Price shall mean the difference between the Beginning Stock
Price and the Ending Stock Price; and Dividends Paid shall mean the total of all
dividends paid on one (1) share of stock during the Performance Period.
    
Following the Total Shareholder Return determination, the Company’s Percentile
Rank shall be determined as follows:
    
Percentile Rank shall be determined by listing from highest Total Shareholder
Return to lowest Total Shareholder Return each company in the Peer Index
(excluding the Company). The top company would have a one hundred percentile
(100%) rank and the bottom company would have a zero percentile (0.0%) rank.
Each company in between would be one hundred divided by n minus one (100/(n-1))
above the company below it, where “n” is the total number of companies in the
Peer Index. The Company percentile rank would then be interpolated based on the
Company TSR. The Companies in the Peer Index shall remain constant throughout
the entire Performance Period.

Article 4. Termination Provisions

Except as provided below in this Article 4 and in Article 5, a Participant shall
be eligible for payment of awarded Performance Shares, as determined in Article
3, only if the Participant’s employment with the Company continues through the
end of the Performance Period.

If participant Retires, suffers a Disability, or dies during the Performance
Period, the Participant (or the Participant’s estate) shall be entitled to that
proportion of the number of Performance Shares as such Participant is entitled
to under Article 3 for such Performance Period that the number of full months of
participation during the Performance Period bears to the total number of months
in the Performance Period. The form and timing of the payment of such
Performance Shares shall be as set forth in Article 8.

“Retirement” or “Retires” means a Separation from service by a Participant on or
after (i) attaining the age of 55 with at least 5 years of service, or (ii)
attaining the age of 65.

“Separation from service” (as defined in Treasury Regulation Section
1.409A-1(h)) during the Performance Period other than (i) due to Retirement,
Disability, or death, or (ii) following a Change in Control shall require
forfeiture of this entire award, with no payment to the Participant.

Article 5. Change in Control

Notwithstanding anything herein to the contrary, in the event of a Change in
Control, the Participant shall be entitled to that proportion of the number of
Performance Shares as such Participant is entitled to under Article 3 for such
Performance Period that the number of full months of participation during the
Performance Period (as of the effective date of the Change in Control) bears to
the total number of months in the Performance Period. When there is a Change in
Control, the TSR shall be calculated as set forth in Article 3, except that the
Ending Stock Price shall mean the average closing price on the applicable stock
exchange of one share of stock for the twenty (20) trading days immediately
prior to the Change in Control. Performance Shares shall be paid out to the
Participant in cash within thirty (30) days of the effective date of the Change
in Control.
    

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"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:

(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);

(b)
Individuals who, as of December 31, 2014 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, or a sale or other disposition of all or
substantially all of the assets of the Company (each a “Business Combination”),
unless, in each case, immediately following such Business Combination, all of
the following have occurred: (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

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(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.

Notwithstanding the above provisions of this definition, to the extent that any
payment under the Agreement due to a Change in Control is subject to Code
Section 409A for deferred compensation, then the term “Change in Control” shall
be construed in a manner that is consistent with Code Section 409A(a)(2)(A)(v),
but only to the extent inconsistent with the above provisions as determined by
the Board.

Article 6. Forfeiture and Repayment.

(a)
In the event the Participant incurs a separation from service for a reason other
than those described in Article 4 herein during the Performance Period this
entire award will be forfeited, unless the separation from service follows a
Change in Control.

(b)
Without limiting the generality of Article 6(a), the Company reserves the right
to cancel all Performance Shares awarded hereunder, whether or not vested, and
require the Participant to repay all income or gains previously realized in
respect of such Performance Shares, in the event of the occurrence of any of the
following events:

(i)
termination of Participant’s employment for Cause;

(ii)
within one year following any termination of Participant’s employment, the Board
determines that the Participant engaged in conduct before the Participant’s
termination date that would have constituted the basis for a termination of
employment for Cause;

(iii)
at any time during the Participant’s employment or the twelve month period
immediately following any termination of employment, Participant:

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(x)
publicly disparages the Company, any of its affiliates or any of its or their
officers, directors or senior executive employees or otherwise makes any public
statement that is materially detrimental to the interests or reputation of the
Company, any of its affiliates or such individuals; or

(y)
violates in any material respect any policy or any code of ethics or standard of
behavior or conduct generally applicable to Participant, including the Code of
Conduct; or

(iv)
Participant engages in any fraudulent, illegal or other misconduct involving the
Company or any of its affiliates, including but not limited to any breach of
fiduciary duty, breach of a duty of loyalty, or interference with contract or
business expectancy.

(c)
If the Board determines that the Participant’s conduct, activities or
circumstances constitute events described in Article 6(b), in addition to any
other remedies the Company has available to it, the Company may in its sole
discretion:

(i)
cancel any Performance Shares awarded hereby, whether or not issued; and/or

(ii)
require the Participant to repay an amount equal to all income or gain realized
in respect of all such Performance Shares. The amount of repayment shall
include, without limitation, amounts received in connection with the delivery or
sale of Shares of such Performance Shares or cash paid in respect of any
Performance Shares.

There shall be no forfeiture or repayment under Article 6(b) following a
Change-in-Control.
(d)
The Board, in its discretion, shall determine whether a Participant’s conduct,
activities or circumstances constitute events described in Article 6(b) and
whether and to what extent the Performance Shares awarded hereby shall be
forfeited by Participant and/or a Participant shall be required to repay an
amount pursuant to Article 6(c). The Board shall have the authority to suspend
the payment, delivery or settlement of all or any portion of such Participant’s
outstanding Performance Shares pending an investigation of a bona fide dispute
regarding Participant’s eligibility to receive a payment under the terms of this
Agreement as determined by the Board in good faith.

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(e)
For purposes of applying this provision:

(i)
“Cause” means any of the following:

(u)
a Participant’s violation of his or her material duties to the Company or any of
its affiliates, which continues after written notice from the Company or any
affiliate to cure such violation;

(v)
Participant’s willful failure to follow the lawful written directives of the
Board in any material respect;

(w)
Participant’s willful misconduct in connection with the performance of any of
his or her duties, including but not limited to falsifying or attempting to
falsify documents, books or records of the Company or any of its affiliates,
making or delivering a false representation, statement or certification of
compliance to the Company, misappropriating or attempting to misappropriate
funds or other property of the Company or any of its affiliates, or securing or
attempting to secure any personal profit in connection with any transaction
entered into on behalf of the Company or any of its affiliates;

(x)
Participant’s breach of any material provisions of this Agreement or any other
non-competition, non-interference, non-disclosure, confidentiality or other
similar agreement executed by Participant with the Company or any of its
affiliates;

(y)
conviction (or plea of nolo contendere) of the Participant of any felony, or a
misdemeanor involving false statement, in connection with conduct involving the
Company or any of its subsidiaries or affiliates; or

(z)
intentional engagement in any activity which would constitute or cause a breach
of duty of loyalty, or any fiduciary duty to the Company or any of its
subsidiaries or affiliates.

(ii)
“Code of Conduct” means any code of ethics or code of conduct now or hereafter
adopted by the Company or any of its affiliates, including to the extent
applicable the Company’s Employee Conduct and Disclosure Policy, as amended or
supplemented from time to time, and the Company’s or subsidiary Risk Management
Policies and Procedures, as amended, supplemented or replaced from time to time.

(f)
Participant agrees that the provisions of this Article 6 are entered into in
consideration of, and as a material inducement to, the agreements by the Company
herein as well as an inducement for the Company to enter into this Agreement,
and that, but for Participant’s agreement to the provisions of this Article 6,
the Company would not have entered into this Agreement.

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Article 7. Dividends

During the Performance Period, all dividends and other distributions paid with
respect to the shares of common stock shall accrue for the benefit of the
Participant to be paid out to the Participant pursuant to Article 8.

Article 8. Form and Timing of Payment of Performance Shares

Payment of the Performance Shares, including accrued dividends, shall be made
fifty percent (50%) in cash and fifty percent (50%) in shares of Company stock.

Payment of Performance Shares shall be made within sixty (60) calendar days
following the close of the Performance Period, subject to the following:

(a)
The Participant shall have no right with respect to any Award or a portion there
of, until such award shall be paid to such Participant.

(b)
If the Committee determines, in its sole discretion, that a Participant at any
time has willfully engaged in any activity that the Committee determines was or
is harmful to the Company, any unpaid pending Award will be forfeited by such
Participant.

(c)
All appropriate taxes will be withheld from the cash portion of the award.

Article 9. Nontransferability

Performance Shares may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant’s Award
Agreement, a Participant’s rights under the Plan shall be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s legal
representative. The terms hereof shall be binding on the executors,
administrators, heirs and successors of the Participant.

Article 10. Administration

This Agreement and the rights of the Participant hereunder are subject to all
the terms and conditions of the Plan, as the same may be amended from time to
time by the Board of Directors, as well as to such rules and regulations as the
Committee may adopt for administration of the Plan. It is expressly understood
that the Committee is authorized to administer, construe, and make all
determinations necessary or appropriate to the administration of the Plan and
this Agreement, in its sole discretion, all of which shall be binding upon the
Participant.

Any inconsistency between the Agreement and the Plan shall be resolved in favor
of the Plan.

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Article 11. Miscellaneous

(a)
The selection of any employee for participation in the Plan shall not give such
Participant any right to be retained in the employ of the Company. The right and
power of the Company to dismiss or discharge any Participant at-will, is
specifically reserved. Such Participant or any person claiming under or through
the Participant shall not have any right or interest in the Plan or any Award
thereunder, unless and until all terms, conditions, and provisions of the Plan
that affect such Participant have been complied with as specified herein.

(b)
With the approval of the Board, the Committee may terminate, amend, or modify
the Plan; provided, however, that no such termination, amendment, or
modification of the Plan may in any way adversely affect the Participant’s
rights under this Agreement without the Participant’s written consent, except as
required by law.

(c)
Participant shall not have voting rights with respect to the Performance Shares.
Participant shall obtain voting rights upon the settlement of Performance Shares
and distribution into shares of common stock of the Company.

(d)
The Participant may defer such Participant’s receipt of the payment of cash and
the delivery of shares of common stock, that would otherwise be due to such
Participant by virtue of the satisfaction of the performance goals with respect
to the Performance Shares, pursuant to the rules of the Black Hills Corporation
Nonqualified Deferred Compensation Plan and the procedures set forth by the
Compensation Committee. If the Participant elects to defer the receipt of the
award, the Participant will be required to pay any necessary taxes from their
own funds. They will not be allowed to have their deferred award reduced for tax
withholding.

(e)
This Agreement shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

(f)
To the extent not preempted by federal law, this Agreement shall be governed by,
and construed in accordance with, the laws of the State of South Dakota.

(g)
Any awards received by Participant are subject to the provisions of the Stock
Ownership Guidelines approved by the Board of Directors.

(h)
Waiver and Modification. The provisions of this Agreement may not be waived or
modified unless such waiver or modification is in writing and signed by the
Company.

 
(i)
Compliance with Exchange Act. If the Participant is subject to Section 16 of the
Exchange Act, Performance Shares granted pursuant to the Award are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act.

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The following parties have caused this Agreement to be executed effective as of
January 1, _____.

 
Black Hills Corporation
 
 
 
By: _______________________
 
 
 
___________________________
 
Participant