Document:

Performance Share Award Agreement

Exhibit 10.4 

Incentive Compensation
Plan

Performance Share Award Agreement 

Black Hills Corporation

____________________________________

(Performance Period ______________ - _______________) 

Contents 

     

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

Black Hills Corporation

Omnibus Incentive Compensation Plan
Performance Share Award Agreement 

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

      Participant:
_____________________

      Target
Performance Share Award: ______ shares

      Performance
Period: _____________ to _______________

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

      Peer
Index:  S&P MID CAP UTILITY INDEX

	  	
Alliant
Energy Corporation; DPL Inc.; Duquesne Light Holding Inc.; Great Plains Energy Inc.;
Hawaiian Electric Inds.; Idacorp Inc.; Northeast Utilities; Nstar; OGE Energy Corporation;
Pepco Holdings Inc.; PNM Resources Inc.; Puget Energy Inc.; Wisconsin Energy Corp,; and
WPS Resources Corp. 

        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. 

        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 greater than Beginning Stock Price (as
defined herein), taking into account any adjustments made pursuant to Paragraph 4.3 of the
Plan. 

1 

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 (Committee) for the
               Performance Period, based on the following chart: 

               

	    TSR Performance
         Relative to

Companies in Peer Index	Payout

(% of Target)
	
80th Percentile or Above	 	 	 	175	%
	70th Percentile	 	 	 	150	%
	60th Percentile	 	 	 	125	%
	50th Percentile	 	 	 	100	%
	40th Percentile	 	 	 	50	%
	30th Percentile or Below	 	 	 	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     =     Change in Stock Price + Dividends Paid

        Return              
                    
  Beginning Stock Price  

	  	
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 twenty (20) trading days
immediately prior to the last day 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. 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. 

2

Article 4. Termination
Provisions 

        Except
as provided below, a Participant shall be eligible for payment of awarded Performance
Shares, as determined in Section 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 Section 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 7. 

        Termination
of employment for any reason other than Retirement, Disability, or death during the
Performance Period shall require forfeiture of this entire award, with no payment to the
Participant. 

Article 5. Change in
Control 

        Notwithstanding
anything herein to the contrary, upon 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 Section 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. 

Article 6. 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 7. 

Article 7. 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. 

                    

3

Article 8.
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. 

Article 9. 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. 

Article 10. 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. 

               

          	(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. 

               

4

          	(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. 

               

        IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of
 __________________. 

	  	         

	  	        Black
Hills Corporation 

	  	        By:
_______________________ 

ATTEST:

__________________________________ 

	  	        ___________________________
        Participant  

5Indemnification Agreement

Exhibit 10.5  

INDEMNIFICATION
AGREEMENT 

        This
Indemnification Agreement (“Agreement”), dated as of the ____ day of
_____________, _____, is entered into between Black Hills Corporation, a South Dakota
corporation (“Black Hills”), and _________________ (“Agent”), who is
serving as an officer or a director, or both, of Black Hills or a subsidiary of Black
Hills, or both, with reference to the following facts: 

	  	
A.    The
Agent is more willing to continue to serve as a director or officer of
                    Black Hills or any one or more of its subsidiaries or any number of
such                     positions provided that he is furnished the indemnity provided
under this                     Agreement; provided the Agent reserves the right to
terminate any of such                     positions or refuse to accept any new
positions.  

	  	
B.    The
South Dakota corporation law (the “SDCL”) empowers Black Hills to
                    indemnify its directors, officers, employees and agents and to
indemnify persons                     who serve, at the request of Black Hills, as the
directors, officers, employees                     or agents of other corporations or
enterprises. The SDCL and the Bylaws of Black                     Hills both specifically
provide that the indemnification provided for therein is                     not
exclusive, and the Bylaws specifically authorize Black Hills to enter into
                    agreements with officers and directors providing indemnification
rights and                     procedures different from those set forth therein.  

	  	
C.    Black
Hills has purchased Directors and Officers Liability Insurance                     (“D&O
Insurance”) as shown in the schedule attached hereto as                     Appendix
A (the “Coverage”) insuring against certain litigation and
                    related expenses and liabilities which may be incurred by its
directors and                     officers and those of its subsidiaries in the
performance of their duties for                     Black Hills or its subsidiaries (when
“subsidiaries” is used herein it                     shall also mean
subsidiaries of subsidiaries). The Coverage attached as Appendix                     A
may have been issued subsequent to the date of this Agreement due to the fact
                    that the execution of the Agreement may have occurred following the
date of the                     Agreement. Notwithstanding, Appendix A shall be
considered the applicable                     Coverage as if the same had been attached
and executed on the date of the                     Agreement.  

	  	
D.    Recent
developments with respect to the terms and availability of D&O
                    Insurance and with respect to the application, amendment and
enforcement of                     statutory and bylaw indemnification provisions
generally have raised questions                     concerning the adequacy and
reliability of the protection afforded thereby.  

	  	
E.    Black
Hills desires that the Agent remain free in his service as a director or
                    officer, or both, of Black Hills or one or more of its subsidiaries
to exercise                     his best judgment in the performance of his duties
without undue concern for                     litigation claims for damages arising out
of or related to the performance of                     such duties.  

         

        NOW,
THEREFORE, in order to induce the Agent to continue to serve as a Director or officer of
Black Hills or one or more of its subsidiaries or any number of such positions and in
consideration of his continued service after the date hereof, Black Hills and the Agent
agree as follows: 

        1.    Actions,
Suits or Proceedings Other Than By or In the Right of Black                     Hills.
Black Hills shall indemnify the Agent against all liabilities, costs,
                    charges, expenses (including, without limitation, attorneys’ fees
and                     related disbursements), judgments, fines and amounts paid in
settlement actually                     and reasonably incurred by him or on his behalf
in connection with the                     investigation, defense or settlement of any
threatened, pending or completed                     action, suit or proceeding, whether
civil, criminal, administrative or                     investigative (other than an
action by or in the right of Black Hills covered by Section 2 of this Agreement)
and any appeal therefrom to which the Agent                     was or is a party or is
threatened to be made a party by reason of the fact that                     he is or was
or has agreed to become a director or officer of Black Hills or of
                    one or more of its subsidiaries or in any capacity with respect to
any employee                     compensation or benefit plan of Black Hills or any of
its subsidiaries or by                     reason of any action alleged to have been
taken or omitted in any such capacity,                     if he acted in good faith and
in a manner he reasonably believed to be within                     the scope of his
authority and in, or not opposed to, the best interests of                     Black
Hills and, if applicable, such subsidiary, and, with respect to any
                    criminal action or proceeding, had no reasonable cause to believe
that his                     conduct was unlawful.  

2 

        2.    Actions
or Suits By or In the Right of Black Hills. Black Hills shall
                    indemnify the Agent against all costs, charges and expenses
(including, without                     limitation, attorneys’ fees and related
disbursements) actually and                     reasonably incurred by him or on his
behalf in connection with the                     investigation, defense or settlement of
any threatened, pending or completed                     action or suit by or in the
right of Black Hills to procure a judgment in its                     favor and any
appeal therefrom, to which the Agent was or is a party or is
                    threatened to be made a party by reason of the fact that he is or was
or has                     agreed to become a director or officer of Black Hills or one
or more of its                     subsidiaries or in any capacity with respect to any
employee compensation or                     benefit plans of Black Hills or any of its
subsidiaries or by reason of any                     action alleged to have been taken or
omitted in any such capacity if he acted in                     good faith and in a
manner he reasonably believed to be within the scope of his                     authority
and in, or not opposed to, the best interests of Black Hills, and if
                    applicable, such subsidiary, except that no indemnification shall be
made in                     respect of any claim, issue or matter as to which such person
shall have been                     adjudged to be liable to Black Hills unless and only
to the extent that the                     Courts of South Dakota or the court in which
such action or suit was brought                     shall determine upon application
that, despite the adjudication of such                     liability but in view of all
the circumstances of the case, the Agent is fairly                     and reasonably
entitled to indemnity for such costs, charges and expenses which                     the
Court or such other court shall deem proper.  

        3.    Indemnification
for Costs, Charges and Expenses of Successful Party.
                    Notwithstanding any other provision of this Agreement, to the extent
that the                     Agent has been successful, on the merits or otherwise,
including, without                     limitation, the dismissal of an action without
prejudice, in defense of any                     action, suit or proceeding referred to
in Sections 1 or 2 of this                     Agreement, or in defense of any
claim, issue or matter therein, he shall be                     indemnified against all
costs, charges and expenses (including attorneys’                    fees) actually
and reasonably incurred by him or on his behalf in connection
                    therewith.  

        4.    Determination
of Right to Indemnification. Any indemnification under Sections 1 or 2 of this
Agreement (unless ordered by a court) shall be                     paid by Black Hills
unless a determination is made (i) by the board of directors                     of Black
Hills by a majority vote of the directors who were not parties to such
                    action, suit or proceeding, or if such majority of disinterested
directors so                     directs, (ii) by independent legal counsel in a written
opinion, or (iii) by the                     shareholders, that indemnification of the
Agent is not proper in the                     circumstances because he has not met the
applicable standard of conduct set                     forth in Sections 1 or 2 of
this Agreement.  

3 

        5.    Termination
of Actions, Suits or Proceedings. For purposes of                     determining
whether the Agent has met the applicable standard of conduct set
                    forth in Sections 1 or 2 of this Agreement, the termination of
any                     action, suit or proceeding by judgment, order, settlement,
conviction, or upon a                     plea of nolo contendere or its equivalent,
shall not, of itself, create any                     presumption that the Agent did not
act in good faith and in a manner which he                     reasonably believed to be
within the scope of his authority and in, or not                     opposed to, the best
interests of, Black Hills and if applicable, any                     subsidiary, and,
with respect to any criminal action or proceeding, had                     reasonable
cause to believe that his conduct was unlawful.  

        6.    Advance
of Costs. Charges and Expenses. Costs, charges and expenses
                    (including, without limitation, attorneys’ fees and related
disbursements)                     incurred by the Agent in defending a civil or criminal
action, suit or                     proceeding shall be paid by Black Hills in advance of
the final disposition of                     such action, suit or proceeding; provided,
however, that the Agent agrees that                     the Agent will repay all amounts
so advanced in the event that it shall                     ultimately be determined by
final judicial decision from which there is no                     further right of
appeal that the Agent is not entitled to be indemnified by                     Black
Hills for such costs, charges and expenses as authorized in this
                    Agreement.  

4

        7.    Procedure
of Indemnification. Any indemnification under Sections 1,                     2,
or 3 of this Agreement, or advance of costs, charges and expenses under Section 6 of
this Agreement shall be made promptly upon, and in any event                     within
60 days after, the written request of the Agent therefor. The right to
                    indemnification or advances granted by this Agreement shall
enforceable by the                     Agent in any court of competent jurisdiction if
Black Hills denies such request,                     in whole or in part, or if no
disposition thereof is made within 60 days. It                     shall be a defense to
any such action (other than an action brought to enforce a                     claim for
the advance of costs, charges and expenses under Section 6 of
                    this Agreement where the required undertaking, if any, has been
received by                     Black Hills) that the claimant has not met the standard
of conduct set forth in Sections 1 and 2 of this Agreement, but the burden of
provingsuch defense                     shall be on Black Hills. Neither the failure of
Black Hills (including its board                     of directors, its independent legal
counsel and its shareholders) to have made a                     determination prior to
the commencement of such action that indemnification of                     the Agent is
proper in the circumstances because he has met the applicable
                    standard of conduct set forth in Sections 1 or 2 of this
Agreement, nor                     the fact that there has been an actual determination
by Black Hills (including                     its board of directors, its independent
legal counsel and its shareholders) that                     the Agent has not met such
applicable standard of conduct, shall be a defense to                     the action or
create any presumption that the Agent has not met the applicable
                    standard of conduct.  

        8.    Settlement.
Black Hills shall not be obligated to reimburse the costs of                     any
settlement to which it has not agreed. If any action, suit or proceeding,
                    including any appeal, within the scope of Sections 1 or 2 of
this                     Agreement, the Agent shall have unreasonably failed to enter
into a settlement                     thereof offered or assented to by the opposing
party or parties in such action,                     suit or proceeding, then
notwithstanding any other provision hereof, the                     indemnification
obligation of Black Hills to the Agent in connection with such
                    action, suit or proceeding shall not exceed the total of the amount
at which                     such offered or agreed upon settlement could have been made
and the expenses                     incurred by the Agent prior to the time such
settlement could reasonably have                     been effected.  

5

        9.    
 Maintenance of Insurance 

	  	
(a)  Subject only to the provisions of Section 9(b) of this Agreement,
Black                     Hills hereby agrees that, so long as the Agent shall continue
to serve as a                     director or officer of Black Hills or one or more of
its subsidiaries and                     thereafter so long as the Agent shall be subject
to any possible claim or any                     threatened, pending or completed action,
suit or proceeding, whether civil,                     criminal or investigative, by
reason of the fact that he is or was or has agreed                     to become a
director or officer of Black Hills or one or more of its                     subsidiaries
or in any capacity with respect to any employee compensation or
                    benefit plans of Black Hills or any of its subsidiaries, Black Hills
will                     purchase and maintain in effect for the benefit of the Agent one
or more valid,                     binding and enforceable policies of D&O Insurance
providing, in all                     respects, coverage at least comparable to that
provided by the Coverage.  

	  	
(b)  Black Hills shall not be required to maintain any policies of D&O
Insurance                     described in Section 9(a) of this Agreement in
effect if, in the                     reasonable business judgment of the directors of
Black Hills (i) such insurance                     is not reasonably available, or (ii)
the premium cost for such insurance is                     substantially disproportionate
to the amount of coverage provided, or (iii) the                     coverage provided by
such insurance is so limited by exclusions that there would                     be
insufficient benefit from such insurance.  

	  	
(c)  Notwithstanding any other provision of this Agreement, in the event
Black Hills                     does not purchase and maintain in effect a policy or
policies of D&O                     Insurance meeting the requirements specified in
Section 9(a) of this                     Agreement, whether for reasons of
availability, cost or otherwise, Black Hills                     agrees to hold harmless
and indemnify the Agent to the full extent of the                     coverage that would
otherwise have been provided for the benefit of the Agent                     pursuant to
the Coverage. The obligation of Black Hills to indemnify set forth                     in
this Section 9(c) is in addition to and not in limitation of those
                    other obligations to indemnify which are set forth in Sections 1,
2, 3                    and elsewhere in this Agreement.  

        10.    Subsequent
Amendment. No amendment, termination or repeal of Article V                     of
Black Hills’ Bylaws, or any successor Bylaws thereto, or of any relevant
                    provisions of the SDCL or any other applicable laws shall affect or
diminish in                     any way the rights of the Agent to indemnification or the
obligation of Black                     Hills arising under this Agreement whether the
alleged actions or conduct giving                     rise to the necessity of such
indemnification arose before or after any such                     amendment, termination
or appeal.  

6

        11.    Other
Rights: Continuation of Right to Indemnification. The
                    indemnification provided by this Agreement shall not be deemed
exclusive of, or                     to diminish or otherwise restrict, any other rights
to which the Agent may be                     entitled under any law (common or
statutory), provision of Black Hills’                    Bylaws or Restated Articles
of Incorporation, agreement, vote of shareholders or                     disinterested
directors or otherwise, both as to action in his official capacity
                    and as to action in any other capacity while holding office or while
employed by                     or acting as agent for Black Hills or any of its
subsidiaries or in any capacity                     with respect to any employee
compensation or benefit plans of Black Hills or any                     of its
subsidiaries, and shall continue as to the Agent after he has ceased to
                    be a director of Black Hills or any of its subsidiaries and to act in
any of the                     foregoing capacities.  

        12.    Notification
and Defense of Claim. Promptly after receipt by the Agent                     of
notice of the commencement of any action, suit or proceeding, the Agent will,
                    if a claim in respect thereof is to be made against Black Hills under
this                     Agreement, notify Black Hills of the commencement thereof. With
respect to any                     such action, suit or proceeding.  

	  	
(a)  Black Hills will be entitled to participate therein at its own expense; and  

	  	
(b)  Except as otherwise provided below, to the extent that it may wish,
Black Hills                     will be entitled to assume the defense thereof, with
counsel reasonably                     acceptable to the Agent. After notice from Black
Hills to the Agent of its                     election so to assume such defense, Black
Hills shall not be liable to the Agent                     under this Agreement for any
legal or other expenses subsequently incurred by                     the Agent in
connection with such action, suit or proceeding, other than
                    reasonable costs of investigation or as otherwise provided below. The
Agent                     shall have the right to employ his own counsel in such action,
suit or                     proceeding but the fees and expenses of such counsel incurred
after notice from                     Black Hills of its assumption of the defense
thereof shall be at the expense of                     the Agent unless (i) the
employment of counsel by the Agent has been authorized                     by Black
Hills, (ii) the Agent shall have reasonably concluded that there may be
                    a conflict of interest or position between Black Hills and the Agent
in the                     conduct of the defense of such action or (iii) Black Hills
does not in fact have                     employed counsel to assume the defense of such
action, in each of which cases                     the fees and expenses of counsel for
the Agent shall be at the expense of Black                     Hills. Black Hills shall
not be entitled to assume the defense of any action,                     suit or
proceeding brought by or on behalf of Black Hills or as to which the
                    Agent shall have made the conclusion provided for in ii above.  

        13.    Other
Payments. Black Hills shall not be liable to make any payment
                    under this Agreement for any liabilities, costs, charges, expenses,
                    attorneys’ fees or disbursements for which payment is actually
made to the                     Agent under any valid and collectible Coverage, or for
which the Agent is                     indemnified by Black Hills or one or more of its
subsidiaries otherwise than                     pursuant to this Agreement.  

7

        14.    
                     Savings Clause. Each of the provisions of this Agreement is a separate
                    and distinct agreement and independent of the others. If this Agreement or any
                    portion hereof shall be invalidated on any ground by any court of competent
                    jurisdiction, then Black Hills shall nevertheless indemnify the Agent as to any
                    liabilities, costs, charges, expenses (including, without limitation,
                    attorneys’ fees and related disbursements), judgments, fines and amounts
                    paid in settlement with respect to any action, suit or proceeding, whether
                    civil, criminal, administrative or investigative, including an action by or in
                    the right of Black Hills, to the full extent permitted by any applicable portion
                    of this Agreement that shall not have been invalidated and to the full extent
                    permitted by applicable law. 

        15.    Subsequent
Legislation. If the SDCL is amended after the date of this
                    Agreement to further expand the indemnification permitted to the
Agent, then                     Black Hills shall indemnify such Agent to the fullest
extent permitted by the                     SDCL, as so amended.  

        16.    Enforcement.  

	  	
(a)  Black Hills expressly confirms and agrees that it has entered into this
                    Agreement and assumed the obligations imposed on Black Hills hereby
in order to                     induce the Agent to continue as a director or officer of
Black Hills or one or                     more of its subsidiaries, and acknowledges that
the Agent is relying upon this                     Agreement in continuing in such
capacity.  

	  	
(b)  Black Hills shall reimburse the Agent for all of the Agent’s costs and
                    expenses incurred in connection with successfully establishing his
right to                     indemnification under this agreement, in whole or in part.  

        17.    Not
an Agreement to Elect or Appoint. This Agreement does not constitute
                    any agreement to reelect a director, to continue any officer in
office for any                     period of time or an agreement of the Agent to
continue any position for any                     length of time or accept any new
position.  

        18.    Governing
Law. This Agreement shall be governed by and construed in
                    accordance with South Dakota law.  

8

        19.    Binding
Effect. This Agreement shall be binding upon the Agent and upon
                    Black Hills, its successors and assigns (including any transferee of
all or                     substantially all of its assets and any successor by merger or
operation of law)                     and shall inure to the benefit of the Agent, his
heirs, personal                     representatives, estate and assigns.  

        20.    Amendment
and Termination. No amendment, modification, termination or
                    cancellation of this Agreement shall be effective unless in writing
signed by                     both parties hereto.  

        21.    Third
Party Benefit. Nothing in this Agreement, whether express or
                    implied, is intended to confer any rights or remedies under or by
reason of this                     Agreement on any person other than parties to this
Agreement and their                     respective heirs, personal representatives,
successors and assigns.  

        22.    Effective
Date. The effective date of this Agreement is the date set                     forth
in the first paragraph hereof, notwithstanding that the execution of the
                    Agreement may have occurred after the effective date.  

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
signed as of the day and year first above written. 

	  	        BLACK
HILLS CORPORATION 

	  	        By:______________________________________

             President and Chief Executive Officer 

	  	             _______________________________________

             Agent 

9

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