SEVERANCE, CONFIDENTIALITY, NON-DISCLOSURE
AND RELEASE AGREEMENT
This Agreement, dated this the 31st day of October, 2001, is between
▇▇▇▇ ▇. ▇▇▇▇, the ("Employee"), and Black Hills Corporation, Inc., a South
Dakota corporation, the ("Employer" or "Company"). Effective on or before
October 30, 2001 ("Effective Date"), Employee resigns and voluntarily terminates
the employment relationship between Employer and Employee.
Employee shall receive all regular wages, benefits and other
compensation due to him by reason of his employment with Employer through the
Effective Date. In addition, upon execution of this Agreement, Employer shall
provide the following severance compensation or benefits to Employee:
Additional Compensation:
Employee will receive an amount equal to $322,920 under the 2001 Short Term
Incentive program. Additionally, for Severance Pay you will receive an amount
equal to nine (9) months of regular pay. This amounts to a one-time, lump, gross
sum payment of $201,825. The Severance Pay shall be taxable as payroll wages.
Employer shall make the usual and customary withholding for federal and state
income tax, Social Security and Medicare. Employer shall furnish Employee with
tax form W-2 for the Severance Pay.
Defined Benefit Plan (Pension Plan), Defined Contribution Plan (401k), Employee
Stock Purchase Plan (ESPP)
Employee will receive information regarding his 401k Plan and the ESPP outlining
the options available to him. Employee's resignation, for pension plan purposes,
is considered as a vested termination. Since Employee is vested, he is deemed
eligible to receive pension benefits pursuant to the plan document and will be
credited with fifteen (15) years of service.
Pension Equalization Plan (PEP)
Employee is vested under the PEP plan, and therefore, is entitled to the
benefits associated with this plan, including the Pension Restoration Benefit.
Attached to this Agreement is a copy of the plan document, which states that the
Pension Restoration Benefit shall be payable at like times and manner as the
Pension Plan Benefit. Should the Board of Directors amend the PEP for
acceleration of plan benefits (not earlier than age 55 with an appropriate
discount for early payment of benefits), you will be eligible to receive your
benefit under the amended plan. Please note the definition of "earnings" as
defined in the PEP document. Payments for unused personal time as well as
payments which are directly or indirectly associated with any long term
equity-based plan are excluded from the earnings calculation.
Unused Personal Time Hours
Employee shall be compensated for any earned unused personal time hours. This
amount will be based upon Employee's current rate of pay. Appropriate taxes will
be withheld. Currently Employee has ninety (90) unused personal time hours
remaining in this anniversary year.
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Payment for this amount will be included as a lump sum in employee's final
paycheck. Employee will be provided with an additional one hundred sixty (160)
hours of personal time as part of this Agreement. This severance compensation
will be paid in a lump sum amount of approximately $20, 700.00.
Health and Welfare Plans
Resignation of employment is considered a qualifying event allowing Employee to
continue medical/health insurance coverage (COBRA) for up to 18 months. Employer
will provide Employee with the initial six months (November and April 2002) at
no cost to Employee. At the end of the six months, Employee will be responsible
for payment of the premiums associated with continuation of coverage for the
remaining months of eligibility. Employee will be informed of the details
regarding continuation of coverage (COBRA) in a separate letter.
Employee will have the opportunity to continue his current coverage under the
basic Life Insurance program through an individual life policy. If Employee also
participated in the Group Universal Life program, he may elect to continue this
coverage as well. The Human Resources Department of Employer will work with
Employee to implement any election of continuation coverage.
Disability benefits, benefit days, and any other employment benefits not listed
herein shall terminate on the last day worked.
Stock Option Plan
During the course of his employment, Employee received grants of stock options.
Employer's Corporate Controller, ▇▇▇▇▇▇ ▇▇▇▇▇▇, shall provide Employee with all
information associated with the termination provisions of this plan. Employee is
advised to give immediate attention to the termination provisions of all
non-qualified stock options, which are currently vested. The plan provides a
90-day time period to take action on any of the vested options. Employee
understands that should no action be taken pursuant to these termination
provisions of the plan, any and all vested options will be forfeited.
Employee will receive a cash payment, less taxes, for an amount equal to the
following: the stock price as of closing on the date of October 30, 2001, 27.75
less the stock price of $21.8750, times 13,667.
Any and all other options, non-qualified stock options or restricted, which are
not vested by Employee's last day of employment will be forfeited according to
the provisions of the plan document.
Consulting Services
Effective October 31, 2001, Employee will provide consulting services as
requested by the Company related to transition or other matters that may require
the Employee's time. Employee will be compensated at an hourly consulting rate
of $130.00 per hour for services provided. Payment of bills for consulting
services will be coordinated through ▇▇▇▇▇ ▇▇▇▇▇▇▇.
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Miscellaneous Terms
1. Employee may attend technology training programs offered by DAKSOFT through
the end of the year 2001, at no cost.
2. Employee may receive phone support for technology-based questions through
the end of the year 2001, at no cost.
3. Employee may have access to the Company's websites to assist in job search
activities. This will include:
a. CERA website and e-mail literature.
b. EEI website and e-mail literature
c. CSFB e-mails and related research.
Information that is determined to be confidential and Company specific
will not be released.
4. Trade journals and periodicals personally addressed to Employee will be
provided until the current subscription expires. Employee will be
responsible for collecting these materials from the General Office.
5. Employee will be allowed to download information from the Palm V to disk or
another storage source. Information that is confidential or involves
Company trade secrets will not be downloaded, copied or retained.
6. Company will forward personal electronic mail (e-mails) addressed to ▇▇▇▇
▇. ▇▇▇▇ through the end of the calendar year. No email containing
confidential information, Company trade secrets or other information
identified in the confidentiality provisions of this Agreement shall be
delivered to Employee.
Employee's Obligations
Employee agrees to pay any outstanding balance on any Employer account, ESPP,
computer purchase plan, and the like. Employer's Human Resources Department will
advise Employee of the payment process.
On or before Employee's final date of employment, all Employer property,
including but not limited to records, files, keys, equipment and credit cards
need to be returned to the Human Resources Department. Employee shall submit all
outstanding Company expenses by his last day of employment along with receipts
so they may be processed accordingly.
General Release
In consideration of receiving the severance benefits from Employer, Employee
hereby waives, releases and discharges all rights, remedies, claims and causes
of action, known or unknown, that he may have against Employer, or any related
company, their officers, directors, employees and their respective insurers
(collectively referred to as "Employer") for any claim or matter relating
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to or arising from his employment, or the termination of his employment. This
Release includes, but is not limited to any claim, right, remedy or cause of
action arising under:
- any common law theory;
- any federal, state or local statute, ordinance or regulation,
including any cause of action pertaining to employment or
employment discrimination (race, age, color, sex or marital
status, religion, national origin or ancestry, or disability);
- any tort theory;
- any contract theory;
- any statute, ordinance or regulation authorizing the recovery of
attorney's fees, liquidated damages, punitive damages or interest.
ADEA/OWBPA Release
Employee specifically releases and waives all rights, remedies, claims and
causes of action, known or unknown, that he may have against Employer for any
matter related to his employment and, the termination of that employment under
the Age Discrimination and Employment Act of 1967, 28 U.S.C. ▇▇.▇▇. 621-634
(ADEA). Employee knowingly and voluntarily makes this Severance and Release
Agreement. This Severance and Release Agreement does not cover rights, remedies,
claims and causes of action that may arise after the date of the execution of
this Agreement, although Employee's agreement, if any, to perform future
actions, such as terminating employment, remain in effect. This Severance and
Release Agreement is not given in exchange for consideration of anything of
value to which Employee already is entitled. Employee has been advised in
writing to consult with an attorney before executing this Agreement.
As provided by the Older Workers Benefit Protection Act (OWBPA) Employee has
been given a reasonable period of time (at least twenty-one (21) days) to
consider this Agreement before executing it. Changes, whether material or
immaterial to this Agreement, shall not restart the running of the twenty-one
(21) day time period. Employee may execute this Agreement prior to the end of
the twenty-one (21) day time period. This Agreement may be revoked by Employee
within seven (7) days after execution of this Agreement by Employee. This
Agreement shall not become effective or enforceable until the revocation period
has expired. The seven (7) day revocation period shall not be shortened by the
parties, by agreement or otherwise. If not revoked by Employee, the eighth day
after the date of Employee's acceptance will be the Effective Date of this
Agreement.
Confidentiality
As further consideration for payment of Severance Pay and benefits, Employee
shall hold the terms of this Agreement in the strictest confidence. The terms
shall not be disclosed to anyone, except to Employee's spouse and legal and tax
advisors, for whom Employee agrees to assume responsibility for any disclosure
by them of the terms of this Agreement. Disclosure may be made by Employee if
required by subpoena or other request for disclosure. Employee shall give
immediate notice to Employer of any subpoena or legal request for information
about the terms of this Agreement.
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Employee shall not disclose to any person or entity any confidential information
and/or trade secrets concerning Employer's (or its subsidiaries' and
affiliates') business operations, financial status or condition, strategic
plans, personnel, or other matters. Nothing contained in this Agreement shall
restrict Employee from working as an employee, officer, consultant or director
for any business that competes with Black Hills Corporation.
Non-Disparagement
The parties wish to exhibit mutual respect towards each other, in recognition of
a long and appreciated association. Neither party shall defame or disparage the
other, its officers or directors, or make negative comments about the other. In
all verbal or written communications regarding the other the parties agree to be
professional and respectful.
The parties will jointly prepare any press release or public announcement
concerning Employee's resignation.
Arbitration
Any dispute over the performance, interpretation, breach or other issue in any
way relating to this Agreement shall be determined and resolved by binding
arbitration, not litigation. Arbitration shall be governed by the South Dakota
Uniform Arbitration Act, or if not addressed in the Act, then by the commercial
rules of the American Arbitration Association. Any arbitration proceeding shall
be venued in Rapid City, South Dakota. Arbitration may be demanded within one
year of the time the claim accrued or the claim shall be forever barred. The
arbitrator shall have the power, but not the obligation to award reasonable
attorney's fees, costs and disbursements to the prevailing party. The
arbitrator's award shall be final and binding and judgment may be entered
thereon by any state or federal court sitting in the State of South Dakota.
Miscellaneous Provisions
If any part of this Agreement is determined by a court of last resort to be
unlawful, invalid or otherwise unenforceable, the balance of this Agreement
shall remain in full force and effect, and the offending provisions shall be
deemed amended to the extent necessary to conform to the law.
No purported modification or waiver of any provision of this Agreement shall be
binding unless in writing and signed by both parties. This Agreement shall be
binding upon, and inure to the benefit of the parties, their heirs, successors,
personal representatives and assigns.
This Agreement is made and entered into in the State of South Dakota, and shall
in all respects be interpreted, enforced and governed by the laws of this State
RELEASE STATEMENT
By signing this Agreement, Employee acknowledges that he has read this Agreement
carefully, had the opportunity to consult with counsel, understands the terms of
this Agreement, and voluntarily agrees to them.
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Dated this 31st day of October, 2001.
BLACK HILLS CORPORATION, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Senior Vice President
EMPLOYEE
/s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
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