Exhibit 10.2

Grandfather Amendment

to the

Pension Equalization Plan

of Black Hills Corporation

 

Pursuant to action taken by the Board of Directors of Black Hills Corporation,
Paragraph 1 of the Pension Equalization Plan of Black Hills Corporation (“Plan”)
is hereby amended to add the following paragraphs, effective January 1, 2005:

Notwithstanding any provision of this Plan to the contrary, the portion of the
Plan that applies to the PEP Benefits, as generally defined in paragraph 5, of
each employee who was a Participant under this Plan on December 31, 2004 to
which the Participant had a legally binding right and whose right to such
benefits was earned and vested before January 1, 2005, as determined under
Section 409A of the Code and the regulations issued thereunder, shall be treated
as “grandfathered” and exempt from the provisions of Section 409A of the Code.
Effective October 3, 2004, in no event shall any amendment or other change to
the PEP Benefit provisions of this Plan cause a material modification of such
provisions, as determined under Section 409A of the Code. Any such amendment or
other change shall be void and of no effect.

Effective January 1, 2005, the grandfathered provisions of this Plan, as
described above, shall be known as the Grandfathered Pension Equalization Plan
of Black Hills Corporation (“Grandfathered PEP”).

Effective January 1, 2005, the PEP Benefits, as defined in paragraph 5 of this
Plan, of all Participants that are earned or become vested after December 31,
2004 and are not grandfathered, as described above, shall be provided under a
separate plan to be known as the 2005 Pension Equalization Plan of Black Hills
Corporation (“2005 PEP”).

Effective January 1, 2005, the portion of the Plan that applies to the Pension
Restoration Benefits, as defined in paragraph 9 of this Plan, of each employee
who was a Participant under the Plan as of December 31, 2004 shall be
transferred to a separate plan to be known as the Restoration Plan of Black
Hills Corporation (“Restoration Plan”). Such Pension Restoration Benefits are
not intended to be grandfathered.

In no event shall any amendment made on or after October 3, 2004 to the
Restoration Plan, the 2005 PEP, or the Pension Plan of Black Hills Corporation
apply to the Grandfathered PEP or to the grandfathered PEP Benefits, as defined
above, provided under the provisions of this Plan as in effect on October 3,
2004.

(Signature Page Follows)

Signature Page to Grandfather Amendment to the Pension Equalization Plan

of Black Hills Corporation

 

 

BLACK HILLS CORPORATION

 

 

By /s/ David R. Emery

 

David R. Emery

 

Chairman, President

 

and Chief Executive Officer

 

 

 

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