Document:

Exhibit 10.1

 

INTERIM CHIEF STRATEGIC OFFICER AGREEMENT

 

THIS AGREEMENT (“Agreement”),
effective as of January 15, 2015 (“Effective Date”), is between James LaChance (hereinafter “Executive”)
and Energy XXI Services, LLC (hereinafter the “Company”).

 

WHEREAS, the Company desires to contract
with Executive to provide consulting services in addition to the services provided by Executive as a member of the Board of Directors
(the “Board”) of Energy XXI Ltd, a Bermuda entity (“Parent”); and

 

WHEREAS, Executive has agreed to perform
consulting services for the Company contemplated by this Agreement;

 

NOW THEREFORE, in consideration of the mutual
covenants contained herein, and intending to be legally bound hereby, the parties hereby agree as follows:

 

1.              
ENGAGEMENT. The Company will engage Executive as consultant and Executive accepts such engagement subject to the
provisions of this Agreement. Executive agrees to perform the duties and responsibilities as specified in this Agreement.

 

1.1.           
Term. This Agreement shall commence on the Effective Date and shall terminate on July 15, 2015 (such period the “Consulting
Period”). To the extent the Refinancing (as defined below) has not been completed by July 15, 2015, the Company and
Executive may mutually agree to extend the Consulting Period for additional non-recurring one month periods.

 

1.2.           
Termination.

 

A.            
This Agreement is subject to termination:

 

		(i)	by either Executive or the Company, upon 30 days’ prior written notice to the other party;

 

		(ii)	by the mutual written agreement of Executive and the Company;

 

		(iii)	by either Executive or the Company, upon the material breach of the other party of the terms of this Agreement; or

 

		(iv)	automatically upon the Closing (as defined below) of the Refinancing.

 

B.             
Upon the termination of this Agreement, the Company will pay to Executive the amount of any Consulting Fee or Success Fee
that has accrued and not been paid up to the date of such termination at the time and in the manner set forth in Section 2,
and will have no further obligation to pay the remaining amount of any such fees; provided, however, that if (i) this
Agreement is terminated by the Company pursuant to clause (A)(i) of this Section 1.2 and (ii) the
Closing of all or any part of the Refinancing occurs within 30 days after such termination, Executive will also be entitled to
receive any incremental Success Fee attributable to any part of the Refinancing (x) with respect to which Executive played
a significant role or (y) that was completed by the Company instead of substantially similar transaction with respect to which
Executive played a significant role, in each case as determined by the Board in its reasonable judgment.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

C.                
Notwithstanding anything to the contrary contained herein, the provisions set forth in Section 3 hereof shall
survive the termination of this Agreement.

 

1.3.           
Duties and Responsibilities.

 

A.               
While engaged by the Company as a consultant, Executive shall serve as the Company’s interim Chief Strategic Officer
and shall perform all duties and accept all responsibilities associated with that capacity as may be specified by the Chief Executive
Officer (“CEO”) of Parent, in consultation with the Board (the “Consulting Services”). Consulting
project work and scope of work must be approved by, and Executive shall report to, the CEO.

 

B.             
Executive represents that Executive is not subject nor a party to any agreement, covenant, understanding or restriction
which would prohibit Executive from entering this Agreement and performing Executive’s duties to the Company.

 

C.             
Executive represents that Executive’s duties and responsibilities under this Agreement are separate from, and in addition
to, Executive’s responsibilities to Parent as a member of the Board.

 

2.              
COMPENSATION FOR CONSULTING SERVICES.

 

A.             
Executive will receive a monthly fee of $200,000 (the “Consulting Fee”) for each full 30 day period worked
(for a total of $1.2 million to the extent Executive continues to providing the Consulting Services through July 15, 2015). To
the extent this Agreement is terminated prior to the 15th of any calendar month during the Consulting Period, Executive will be
entitled to a prorated payment of the Consulting Fee for such month. The Consulting Fee is payable to Executive by the Company
within 15 days after the end of the applicable month in which such fee is earned. When Executive is required to travel for business
in his role as interim Chief Strategic Officer, all reasonable and documented business expenses incurred in connection with such
travel will be reimbursed by the Company, in accordance with Parent’s travel and expense documentation and reimbursement
policies.

 

B.             
To the extent (i) Parent or an affiliate of Parent completes one or a series of transactions to provide Parent and
its affiliates (together, the “Parent Group”) with additional capital of more than $1 billion (which may
include, without limitation, securities offerings, refinancing or debt improvement) prior to the end of the Consulting Period (such
transactions, collectively, the “Refinancing”) and (ii) Executive continuously provides the Consulting
Services through the closing of the last event constituting the Refinancing (the “Closing”), Executive will
be entitled to receive the right to payment described in this Section 2.B. (the “Success Fee”),
in accordance with and subject to the terms and conditions set forth herein. Notwithstanding any provision in this Agreement to
the contrary, and for the avoidance of doubt, the Refinancing and each material component thereof shall be subject to the approval
of the Board.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

C.             
Objective Criteria Portion of Success Fee. Executive will be eligible to receive, subject to this Section 2.C.,
up to $5 million (the “Cap”) upon the achievement of one or more of the criteria (the “Objective Success
Fee Criteria”) set forth in Schedule 2.C.

 

D.             
Board-Determined Portion of Success Fee. The Board may award up to an additional $1 million to Executive, based
upon qualitative factors to be determined by the Board including, without limitation, the nature of any maturity or amortization
extension and the relaxation of financial covenants in any of the Parent Group’s debt documents.

 

E.              
For the avoidance of doubt, in no event will the Success Fee be more than $6 million.

 

F.             
The Success Fee, if any, will be paid to Executive as follows:

 

		(i)	Fifty percent of the Success Fee will be paid to the Executive in a lump sum cash payment at the time specified in Section
2.G. (the “Cash Component”), if and to the extent that Executive does not make the RSU Election (as defined
below). Executive may, on or before five days after Closing, elect by written notice to the Company (the “RSU Election”)
to receive all or a portion of the Cash Component in the form of restricted stock units (“RSUs”) in which case
Parent will cause to be issued to Executive the number of cash-settled RSUs equal to that portion of the Cash Component for which
Executive made an RSU Election divided by $3.04, which is the value weighted average price (Bloomberg) of the Company’s Stock
common stock, par value $0.005 per share (the “Stock”), for the period beginning on December 1, 2014 and ending
on January 31, 2015 (the “Per Share Price”).

 

		(ii)	The remaining fifty percent of the Success Fee (the “Mandatory RSU Component”) will be converted into the
right to receive the number of cash-settled RSUs equal to (x) the Mandatory RSU Component divided by (y) the Per Share
Price.

 

		(iii)	The RSUs will be granted pursuant to the form of agreement approved by the Compensation Committee of Parent (the “Award
Agreement”) at least 15 days prior to Closing and settled at the time and in the manner provided in Section 2.G.
For the avoidance of doubt, nothing in this Agreement will require Parent to issue any shares of Stock to Executive under the Energy
XXI Services, LLC 2006 Long- Term Incentive Plan.

 

G.             
The RSUs will become vested and nonforfeitable on the date granted and will be settled on the earliest to occur of: (x)
the 12-month anniversary of the Closing, (y) a “change in the ownership or effective control” or “a change in
the ownership of a substantial portion of the assets” of Parent (as defined in Treasury Regulation § 1.409A-3(i)(5))
and (z) the date that Executive incurs a “separation from service” with Parent (as defined in Treasury Regulation §
1.409A-1(h)) (“Separation from Service” and such date or event set forth in clause (x), (y) or
(z), the “Settlement Date”). In the event Executive is a “specified employee” within the
meaning of Treasury Regulation § 1.409A-1(i) as of the date of the Executive’s Separation from Service, Executive
shall not be entitled to any settlement pursuant to clause (z) of this Section 2.G. until the earlier of (i)
the date that is six months after his Separation from Service for any reason other than death, and (ii) the date of Executive’s
death. All RSUs granted to Executive hereunder will be settled in a lump sum cash payment in an amount equal to the number of RSUs
multiplied by the per share closing price of the Stock on the Settlement Date (the “RSU Settlement Payment”);
provided, however, Executive may elect, prior to the Settlement Date, to purchase from Parent, in lieu of receipt
of all or a portion of the RSU Settlement Payment in cash, a number of shares of Stock equal to (m) all or such portion, as
applicable, of the RSU Settlement Payment divided by (n) the closing price of the Stock on the Settlement Date.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

H.             
Executive acknowledges that the issuance of any shares of Stock acquired by Executive pursuant to Section 2.G.
will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will therefore
be “restricted securities” within the meaning of Rule 144 under the Securities Act and may bear a legend indicating
the same. As a result, no such shares of Stock may be resold by Executive unless such resale is registered on an effective registration
statement under the Securities Act or, based on the advice of legal counsel to the Company, an exemption from such registration
is available. Executive acknowledges that the Company is not obligated to file a registration statement for any such resale. Executive
represents to the Company that he is, and will be on the Settlement Date, an “accredited investor” within the meaning
of the Regulation D under the Securities Act. Any RSUs issued to Executive will be subject to the terms and conditions of the agreement
evidencing such award.

 

I.               
For the avoidance of doubt, any Consulting Fees paid to Executive hereunder will
not be credited against any Success Fee.

 

J.              
Parent represents and warrants that actions by Executive as interim Chief Strategic Officer shall be covered and insured
by the insurance which Parent maintains to indemnify its directors and officers and that Executive will be entitled to indemnification
from Parent comparable to that provided to officers of Parent.

 

3.             
RESTRICTIVE COVENANTS. Executive acknowledges and agrees that the provisions hereunder are reasonable and necessary
to protect the Company’s legitimate interests, and that the Company would not have entered into this Agreement without such
provisions.

 

3.1.           
Non-Disclosure. Executive acknowledges and agrees that any and all information relating to the Company (which shall
include any and all information relating to any of the Company’s related or affiliated entities at any level), including
without limitation its (i) business plans, (ii) present and potential customers and/or contracting counter-parties,
(iii) financial, operational, marketing, personnel, and management procedures, strategies, and tactics, (iv) computerized
data, (v) developments, (vi) official documents, brochures, and disclosures, (vii) contractual agreements, (viii) software,
(ix) training procedures, and (x) trade secrets are “Proprietary Information” of the Company. Executive
agrees that Executive will not use this Proprietary Information for Executive’s own benefit or otherwise, and will not disclose
this Proprietary Information or any of Executive’s Work (defined below) to any person, firm, corporation, or any other entity
for any reason during the term of this Agreement and any time thereafter, without prior written consent of the Company.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

3.2.           
Non Solicitation of Employees. During the term of this Agreement and for two (2) years thereafter, without prior
written consent of the Company, Executive will not in any way, directly or indirectly, for himself or on behalf of any other person
or entity, associate in business as an employer, employee or in any other manner, with any person who is or was an employee, officer
or agent of the Company unless such person has not been employed by the Company for a period of one year.

 

3.3.           
Ownership of Work. Executive agrees that the products and results of Executive’s service for the Company and
the rest of the Parent Group (“Work”) is considered a work made for hire within the meaning of Title 17 of
the United States Code. Executive agrees that the Work belongs to the Company and is the Company’s sole and exclusive property.
If any Work is not considered a work made for hire, then Executive hereby assigns to the Company all rights to such Work, including
without limitation all patent rights, copyrights and trade secret rights.

 

3.4.           
Adjudication. If any court or competent jurisdiction shall determine that the duration, geographic limit, or any
other aspect of any covenant contained in Section 3 of this Agreement is unenforceable, then it is the intention of
the parties that the covenant shall not be terminated but shall be deemed amended to the extent required to render it valid and
enforceable. Such amendment shall apply only with respect to the operation of such covenant in the jurisdiction of the court that
has made the adjudication.

 

3.5.           
Violation; Relief. Executive acknowledges that any violation of Sections 3.1 and 3.2 above will
result in irreparable injury to the Company. Executive also acknowledges that the Company shall be entitled to preliminary emergency
and permanent injunctive relief, without the need for proving actual damages, in addition to any other rights or remedies to which
the Company may be entitled. In the event of such violation, Executive and the Company agree to the exclusive jurisdiction and
venue of any court of general jurisdiction of Harris County, Texas or the United States District Court for the Southern District
of Texas.

 

3.6.           
Provision of Documentation. Executive agrees that until the expiration of the Section 3 covenants that
Executive will provide, and that the Company may similarly provide, a copy of these covenants to any business or enterprise that
Executive may directly or indirectly own, manage, operate, finance, join, control, participate in, or be connected with.

 

3.7.           
United States Securities Laws. Executive agrees that he is aware that United States securities laws prohibit any
person who has material non-public information concerning a publicly traded company or entity from purchasing or selling securities
of such company or entity, or from communicating such information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities. Executive acknowledges and agrees that he has received
and will comply with the insider trading policy adopted by Parent.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

3.8.           
Survival. The restrictive covenants and remedies of Section 3 of this Agreement shall survive the termination
of this Agreement.

 

4.              
GOVERNING LAW. This Agreement has been entered into in the State of Texas, and any matter pertaining to or
arising out of the Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas, without
giving effect to principles of conflicts of law.

 

5.              
NOTICE. All notices and other communications necessary in connection herewith shall be in writing and shall
be deemed to have been given when mailed by registered or certified mail, return receipt requested, as follows (provided that
notice of change of address shall be deemed given only when received):

 

		If to the Company:	Energy XXI Services, LLC

1021 Main Street, Suite 2626

Houston, Texas 77002 

Attention: Legal Department

or the Company’s then current
address

 

		If to Executive:	James LaChance

At the address set forth in the Company’s
records

 

6.             
CONTENTS OF AGREEMENT. This Agreement set forth the entire agreement between Executive and the Company regarding
the subject matter hereof, and supersedes all prior and contemporaneous discussions, negotiations and agreements, written or oral,
between Executive and the Company and its affiliates regarding Executive’s services to the Company; provided, however,
that nothing in this Agreement is intended to alter the services, duties, obligations or compensation contemplated with respect
to Executive in his capacity as a member of the Board of Parent.

 

7.              
MODIFICATION. This Agreement can be modified only by a written agreement signed by both parties.

 

8.             
EVERABILITY. If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid
or unenforceable, (a) a the parties shall negotiate n good faith a suitable and equitable provision in substitution therefor in
order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected
by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of
such provision, or the application thereof, in any other jurisdiction.

 

9.              
REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon the Company by this Agreement is intended to be
exclusive of any other remedy. No delay or omission by the Company in exercising any right, remedy or power hereunder or existing
at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the Company
from time to time and as often as may be deemed expedient or necessary by the Company in its sole discretion.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

10.           
INDEPENDENT CONTRACTOR. In the performance of services hereunder, Executive shall be and act as an independent
contractor. Nothing in this Agreement, or in the relationship between Executive and the Company, shall be deemed to constitute
a partnership, joint venture or other similar relationship, and Executive agrees not to make any contrary assertion, claim or
counterclaim in any action, suit or other legal proceeding involving Executive and the Company. Executive is responsible for all
losses, damages, judgments, liabilities, claims, injuries, costs, and expenses arising directly or indirectly from the ownership
and operation of Executive’s business, Executive’s motor vehicles, Executive’s property, and Executive’s
performance of services under this Agreement. Executive is not authorized to make any promise, agreement, or contract on the Company’s
behalf, to bind the Company in any manner, or to hold herself out as anything but an independent businessperson. Executive has
full responsibility for all debts and obligations of Executive’s business including without limitation all bills, invoices,
debts, taxes, payroll, and insurance costs. None of the Company or its affiliates will withhold federal, state or local income
or employment taxes from amounts payable to Executive and Executive will be individually liable for payment of such amounts. Executive
will not be required to devote a specified amount of time to the services to be provided to the Company and will be free to pursue
other business activities outside of the Company, provided that such activities do not contravene the terms and conditions of
this Agreement or otherwise interfere with the performance by Executive of his duties as a consultant.

 

11.            
ACCOUNTING TERMS. Each accounting term not otherwise defined in this Agreement has the meaning commonly applied
to it in accordance with generally accepted accounting principles in the United States, as in effect from time to time.

 

12.           
NON-DISPARAGEMENT. Executive shall refrain from publishing any oral or written statements about the Company
or any of its parent, predecessor, successor, subsidiary, and affiliate companies, past and present, as well as their respective
employees, officers, directors, stockholders or shareholders (collectively, the “Company Parties”), to any of the
Company’s employees, officers, directors, stockholders, shareholders, clients, threatened violation of this prohibition
may be enjoined by the courts. The rights afforded to the Company and the Company Parties under this provision are in addition
to any and all rights and remedies otherwise afforded by law.

 

13.            
WAIVER OF PUNITIVE DAMAGES. Both Executive and the Company waive to the fullest extent permitted by law,
any right or claim for any punitive, exemplary, consequential, or speculative damages against the other and agree that in a dispute
between them, except as otherwise provided herein, each is limited to the actual damages sustained.

 

14.            
VENUE. All proceedings arising out of or relating to this Agreement, any of the other Refinancing documents
or the consummation of the Refinancings shall be heard and determined exclusively in the state courts or federal courts in Harris
County, Texas. Consistent with the preceding sentence, Executive and the Company (x) irrevocably submit to the exclusive
jurisdiction of the state courts and federal courts in Texas (and of the appropriate appellate courts therefrom) for the purpose
of any proceeding arising out of or relating to this Agreement, (y) irrevocably waive, and agree not to assert by way of
motion, defense or otherwise, in any such proceeding, any claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution, that the proceeding is brought in an inconvenient
forum, that the venue of the proceeding is improper, or that this Agreement may not be enforced in or by any of the above-named
courts and (z) irrevocably consent to and grant any such court exclusive jurisdiction over the person of such parties and
over the subject matter of such proceeding and agree that mailing of process or other papers in connection with any such proceeding
in the manner provided in Section 5.

 

15.           
WAIVER OF JURY TRIAL. EXECUTIVE AND THE COMPANY IRREVOCABLY AND UNCONDITIONALLY WAIVE TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT HE OR IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION, SUIT OR PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

IN WITNESS WHEREOF the undersigned have
executed this Agreement as of the date first above written.

 

	James LaChance	Energy XXI Services, LLC	 
	 	 	 	 
	 	 	 	 
	/s/ James LaChance	By:	/s/ Antonio de Pinho	 
	 	Name:	Antonio de Pinho	 
	 	Title:	President	 

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].

 

    	 

    	 

    

 

Schedule 2.C.

 

Objective Success Fee Criteria

 

Confidential

 

[***]

 

 

 

 

 

 

Specific terms in this Exhibit
have been redacted because confidential treatment for those terms has been requested. The redacted material has been separately
filed with the Securities and Exchange Commission, and the terms have been marked at the appropriate place with three asterisks
[***].BKH Ex-10.10 12 2014

Exhibit 10.10

Black Hills Corporation
Incentive Compensation Plan
Performance Share Award Agreement
(Effective for Plans beginning on or after January 1, 2015)
Performance Period _________________________

1

Contents

		
	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

Black Hills Corporation
2005 Omnibus Incentive Plan
Performance Share Award Agreement
(Effective for Plans beginning on or after January 1, 2015)

Performance Period _______________________________

You have been selected to be a participant in the Black Hills Corporation 2005 Omnibus
Incentive Plan (the “Plan”), as specified below:

Participant:  _____________________

Target Performance Share Award:  ______ shares

Performance Period:  ______________________________

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 _____________, 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.

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

1

The parties hereto agree as follows:

Article 1. Performance Period

The Performance Period commences on ____________ and ends on _______________.

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

2

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) 

3

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.

"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), below;

		
	(b)
	Individuals who, as of December 31, 2012 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

4

		
	(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;

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

		
	(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.

6

		
	(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 

7

Agreement, and that, but for Participant’s agreement to the provisions of this Article 6, the Company would not have entered into this Agreement.

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.

9

The following parties have caused this Agreement to be executed effective as of ________________.

Black Hills Corporation

By: _______________________

___________________________
Participant

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