STATEMENT OF DESIGNATIONS, PREFERENCES
AND RELATIVE RIGHTS AND LIMITATIONS
OF
NO PAR PREFERRED STOCK, SERIES 2000-A
OF
BLACK HILLS CORPORATION
(formerly Black Hills Holding Corporation)
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Pursuant to Section 47-3-7
of the South Dakota Codified Laws
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Black Hills Corporation, a corporation organized and existing under the
South Dakota Codified Laws, does hereby certify that pursuant to the provisions
of Section 47-3-7 of the South Dakota Codified Laws, and the provisions of its
Articles of Incorporation, its Board of Directors, at a meeting held on December
12, 2000, duly adopted the following resolution establishing the rights,
preferences, privileges and restrictions of a series of preferred stock, having
no par value, of the corporation which resolution remains in full force and
effect as of the date hereof:
"WHEREAS, the Board of Directors of Black Hills Corporation (the
"Corporation") is authorized, within the limitations and restrictions stated in
its Articles of Incorporation (the "Articles of Incorporation"), to fix from
time to time by resolution or resolutions adopted prior to the issuance of any
shares of each particular series of preferred stock, having no par value (the
"No Par Preferred Stock"), the number of shares constituting that series and the
distinctive designation of that series; the dividend rate on the shares of that
series, whether dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of dividends on
the shares of that series; whether that series shall have voting rights, in
addition to any voting rights provided by law, and if so, the terms of such
voting rights, including, but not limited to, rights to elect a specified number
of Directors in the event that dividends, if any, on Preferred Stock, remain
unpaid for a specified period of time; whether that series shall have conversion
privileges, and, if so, the terms and conditions of such conversion, including
provisions for adjustment of the conversion rate in such events as the Board of
Directors shall determine; whether or not the shares of that series will be
redeemable, and, if so, the terms and conditions of such redemption, including
the date or date upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates; whether that series shall have a
sinking fund for the redemption or purchase of shares of that series, and, if
so, the terms and amount of such sinking fund; the rights of the shares of that
series in the event of voluntary or involuntary liquidation, dissolution, or
winding up of the corporation, and the relative rights of priority, if any, of
payment of shares of that series; any other relative rights, preferences, and
limitations of that series, not inconsistent with the provisions of Article Five
of the Articles of Incorporation applicable to all series; and
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WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to authorize the issuance, and to
designate and fix the terms of a series of No Par Preferred Stock and the number
of shares constituting such series;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to Article Five of the
Articles of Incorporation, there is hereby authorized such series of No Par
Preferred Stock on the terms and with the provisions herein set forth:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this Section 1
shall have, for all purposes of this resolution, the meanings specified (with
terms defined in the singular having comparable meanings when used in the
plural). Capitalized terms used herein which are not otherwise defined shall
have the meanings ascribed thereto in the Articles of Incorporation.
Automatic Conversion Date. The term "Automatic Conversion Date" shall have
the meaning set forth in Section 8(a)(ii) below.
Common Stock. The term "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Corporation.
Common Stock Dividend Payment Date. The term "Common Stock Dividend Payment
Date" shall have the meaning set forth in Section 4(a) below.
Conversion Date. The term "Conversion Date" shall have the meaning set
forth in Section 8(c) below.
Conversion Price. The term "Conversion Price" shall have the meaning set
forth in Section 8(d) below.
Convertible Securities. The term "Convertible Securities" shall have the
meaning set forth in Section 8(e)(iii) below.
Current Market Price. The term "Current Market Price" shall mean the
current market price of the Common Stock as computed in accordance with Section
8(e)(xi) below.
Initial Issue Date. The term "Initial Issue Date" shall mean the date that
shares of No Par Preferred Stock, Series 2000-A are first issued by the
Corporation.
Liquidation. The term "Liquidation" shall mean any liquidation, dissolution
or winding up of the affairs of the Corporation, whether voluntary or
involuntary; provided, that neither the voluntary sale, conveyance, lease,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation, nor the consolidation or merger of the Corporation with one or more
other entities, shall, by itself, be deemed a Liquidation.
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Liquidation Preference Amount. The term "Liquidation Preference Amount"
shall mean an amount equal to the sum of (i) $1,000 per share of No Par
Preferred Stock, Series 2000-A, plus (ii) all accrued and unpaid dividends
thereon calculated in accordance with Sections 4(a) and 4(b) hereof.
No Par Preferred Stock, Series 2000-A. The term "No Par Preferred Stock,
Series 2000-A", shall mean the series of No Par Preferred Stock authorized
hereby.
Person. The term "Person" shall mean an individual or a corporation,
limited liability company, partnership, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
Post-Redemption Record Date. The term "Post-Redemption Record Date" shall
have the meaning set forth in Section 5(a) below.
Preferred Dividend. The term "Preferred Dividend" shall have the meaning
set forth in Section 4(a) below.
Preferred Dividend Payment Date. The term "Preferred Dividend Payment Date"
shall have the meaning set forth in Section 4(a) below.
Preferred Dividend Rate. The term "Preferred Dividend Rate" shall have the
meaning set forth in Section 4(a) below.
Preferred Quarterly Dividend Period. The term "Preferred Quarterly Dividend
Period" shall have the meaning set forth in Section 4(a) below.
Pre-Redemption Record Date. The term "Pre-Redemption Record Date" shall
have the meaning set forth in Section 5(a) below.
Quoted Price. The term "Quoted Price" shall have the meaning set forth in
Section 8(e)(xi) below.
Redeemed Shares. The term "Redeemed Shares" shall have the meaning set
forth in Section 5(a) below.
Redemption Date. The term "Redemption Date" shall have the meaning set
forth in Section 5(a) below.
Redemption Notice Date. The term "Redemption Notice Date" shall have the
meaning set forth in Section 5(c).
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Redemption Price. The term "Redemption Price" shall have the meaning set
forth in Section 5(a) below.
Trading Days. The term "Trading Days" shall have the meaning set forth in
Section 8(e)(xi) below.
2. Designation.
The series of No Par Preferred Stock authorized hereby shall be designated
as the "No Par Preferred Stock, Series 2000-A." The number of shares
constituting such series shall initially be Twenty-One Thousand Five Hundred
(21,500). The No Par Preferred Stock, Series 2000-A, shall have no par value.
3. Consideration.
The consideration for the No Par Preferred Stock, Series 2000-A shall for
all purposes be deemed to be $1,000 per share.
4. Dividends.
(a) The holders of the shares of No Par Preferred Stock, Series 2000-A
shall be entitled to receive cumulative quarterly cash dividends at a dividend
rate equal to 1% per annum per share (the "Preferred Dividend Rate") computed on
the basis of $1,000 per share, when and as declared by the Board of Directors of
the Corporation or a duly authorized committee thereof, out of funds legally
available for the payment of dividends; in preference to and in priority over
any dividends upon Common Stock (the "Preferred Dividend"). Quarterly dividend
periods (each a "Preferred Quarterly Dividend Period") shall commence on
February 28, May 31, August 31, and November 30, in each year, except that the
first Preferred Quarterly Dividend Period shall commence on the date of issuance
of the No Par Preferred Stock, Series 2000-A and shall end on and include the
day immediately preceding the first day of the next Preferred Quarterly Dividend
Period. Dividends on the shares of No Par Preferred Stock, Series 2000-A shall
be payable in arrears on March 1, June 1, September 1 and December 1 of each
year (each, a "Preferred Dividend Payment Date"), commencing March 1, 2000 [or
June 1 in the event Closing occurs after March 1]. Each such dividend shall be
paid to the holders of record of the No Par Preferred Stock, Series 2000-A as
they shall appear on the stock register of the Corporation on such record date,
not exceeding 45 days nor less than 10 days preceding such Preferred Dividend
Payment Date, as shall be fixed by the Board of Directors of the Corporation or
a duly authorized committee thereof. If any date on which dividends would
otherwise be payable is a Saturday, Sunday or a day on which banking
institutions in the State of South Dakota are authorized or obligated by law or
executive order to close, then the dividends otherwise payable on such date
shall instead be payable on the next succeeding business day. In addition to the
Preferred Dividend, the holders of record of No Par Preferred Stock, Series
2000-A, shall be entitled to receive, when and as declared by the Board of
Directors or a duly authorized committee thereof out of funds legally available
therefor, dividends (cash or otherwise) in an amount equal to the amount of any
dividend declared (other than a dividend declared under a stockholder rights
plan or in connection with the implementation of a stockholders rights plan)
payable with respect to the Common Stock multiplied by the number of shares of
Common Stock into which each share of No Par Preferred Stock, Series 2000-A is
convertible pursuant to Section 8 hereof (it being assumed for such purposes
that all conditions to conversion have been met, whether or not such conditions
have in fact been so met), as of the record date for the determination of
holders of shares of Common Stock and No Par Preferred Stock, Series 2000-A
entitled to receive such dividends. No dividend shall be declared or paid with
respect to Common Stock (other than a dividend declared under a stockholder
rights plan or in connection with the implementation of a stockholders rights
plan) unless such a dividend is declared and paid with respect to the No Par
Preferred Stock, Series 2000-A. The record dates and payment dates (the "Common
Stock Dividend Payment Date") with respect to the No Par Preferred Stock, Series
2000-A shall be the same as the record and payment dates with respect to the
payment of dividends with respect to the Common Stock.
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(b) The amount of any dividends accrued on any share of the No Par
Preferred Stock, Series 2000-A on any Preferred Dividend Payment Date shall be
deemed to be the amount of any unpaid dividends accumulated thereon to and
including such Preferred Dividend Payment Date, whether or not earned or
declared. Accumulated and unpaid dividends shall not bear interest. The amount
of dividends accrued on any share of the No Par Preferred Stock, Series 2000-A
on any date other than a Preferred Dividend Payment Date shall be deemed to be
the sum of (i) the amount of any unpaid dividends accumulated thereon to and
including the last preceding Preferred Dividend Payment Date, whether or not
earned or declared, and (ii) an amount determined by multiplying (x) the
Preferred Dividend Rate by (y) a fraction, the numerator of which shall be the
number of days from the last preceding Preferred Dividend Payment Date to and
including the date on which such calculation is made and the denominator of
which shall be the full number of days in such Preferred Quarterly Dividend
Period.
5. Redemption.
(a) The Corporation by resolution of its Board of Directors may redeem the
No Par Preferred Stock, Series 2000-A, in whole or in part, at any time. The
redemption price per share (the "Redemption Price") for such shares of No Par
Preferred Stock, Series 2000-A so redeemed shall equal the Liquidation
Preference Amount on the date fixed for redemption (the "Redemption Date").
Notwithstanding such redemption, if the Redemption Date falls prior to the
record date of any dividend payable on Common Stock (other than a dividend
declared under a stockholder rights plan or in connection with the
implementation of a stockholder rights plan), the holders of record of any
shares of No Par Preferred Stock, Series 2000-A so redeemed (the "Redeemed
Shares") shall be entitled to receive on the next Common Stock Dividend Payment
Date following the next record date for the payment of dividends on Common Stock
(the "Post-Redemption Record Date") provided that the Post-Redemption Record
Date occurs within twelve months of the Redemption Date, an amount equal to the
product of the number of shares of Common Stock into which such Redeemed Shares
were convertible on the Redemption Date (assuming for such purpose that the
Redeemed Shares were convertible on the Redemption Date) multiplied by (A) the
dividend payable on each share of Common Stock multiplied by (B) a fraction the
numerator of which is the number of days elapsed from the last Common Stock
dividend record date prior to the Redemption Date (the "Pre-Redemption Record
Date") to the Redemption Date and the denominator of which is the number of days
elapsed from the Pre-Redemption Record Date to the Post-Redemption Record Date.
(b) Nothing in this Section 5 shall be construed to preclude a holder of No
Par Preferred Stock, Series 2000-A from converting any or all of its shares of
No Par Preferred Stock, Series 2000-A in accordance with Section 8 at any time
prior to the close of business on the third full business day prior to the
Redemption Date.
(c) Notice of redemption shall be given at least thirty days and not more
than sixty days prior to the date fixed for such redemption by mailing to the
holders of record of the Preferred Stock to be redeemed, at their respective
addresses as the same shall appear on the books of the Corporation; but neither
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any shares of
the Preferred Stock so to be redeemed.
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6. Voting Rights; Priority.
(a) The No Par Preferred Stock, Series 2000-A, except as provided in the
Articles of Incorporation or as otherwise required by law, shall have no voting
rights.
(b) The No Par Preferred Stock, Series 2000-A shall rank pari passu with
each other series of Preferred Stock as to dividends and distribution of assets
on liquidation.
7. Liquidation Preference.
(a) In the event of any Liquidation, then before any distribution shall be
made to the holders of the Common Stock, the holders of the shares of the No Par
Preferred Stock Series 2000-A at the time outstanding shall be entitled to
receive in cash upon any involuntary liquidation, dissolution or winding up of
the affairs of the Corporation the Liquidation Preference Amount.
(b) Written notice of any Liquidation of the Corporation, stating a payment
date and the place where the distributive amounts shall be payable, shall be
given by mail, postage prepaid, not less than 30 days prior to the payment date
stated therein, to the holders of record of the No Par Preferred Stock, Series
2000-A at their respective addresses as the same shall appear on the books of
the Corporation.
8. Conversion.
(a) Each share of No Par Preferred Stock, Series 2000-A shall be (i)
convertible at the option of the holder thereof into validly issued, fully paid
and nonassessable shares of Common Stock, in an amount determined in accordance
with Section 8(d) below, at any time prior to the fifth (5th) anniversary of the
Initial Issue Date, and (ii) automatically converted into validly issued, fully
paid and nonassessable shares of Common Stock, in an amount determined in
accordance with Section 8(d) below, if outstanding on the fifth (5th)
anniversary of the Initial Issue Date (the "Automatic Conversion Date").
(b) Immediately following the conversion of No Par Preferred Stock, Series
2000-A into Common Stock on the Conversion Date (i) such converted shares of No
Par Preferred Stock, Series 2000-A shall be deemed no longer outstanding and
(ii) the Persons entitled to receive the Common Stock upon the conversion of
such converted No Par Preferred Stock, Series 2000-A shall be treated for all
purposes as having become the owners of record of such Common Stock. Upon the
issuance of shares of Common Stock upon conversion of No Par Preferred Stock,
Series 2000-A pursuant to this Section 8, such shares of Common Stock shall be
deemed to be duly authorized, validly issued, fully paid and nonassessable.
(c) To convert No Par Preferred Stock, Series 2000-A into Common Stock at
the option of the holder pursuant to Section 8(a)(i), a holder must give written
notice to the Corporation at its principal office that such holder elects to
convert No Par Preferred Stock, Series 2000-A into Common Stock, and the number
of shares to be converted. Such conversion, to the extent permitted by law,
regulation, rule or other requirement of any governmental authority and the
provisions hereof, including but not limited to Section 5(b), shall be deemed to
have been effected as of the close of business on the date on which the holder
delivers such notice to the Corporation (such date and the Automatic Conversion
Date are each referred to herein as the "Conversion Date" for purposes of any
conversion of No Par Preferred Stock, Series 2000-A pursuant to Section 8(a)).
Promptly after the Conversion Date, the holder shall (i) surrender the
certificate or certificates evidencing the shares of No Par Preferred Stock,
Series 2000-A converted or to be converted, duly endorsed in a form reasonably
satisfactory to the Corporation, at the office of the Corporation or of the
transfer agent for the No Par Preferred Stock, Series 2000-A, (ii) state in
writing the name or names in which the certificate or certificates for shares of
Common Stock are to be issued, (iii) provide evidence reasonably satisfactory to
the Corporation that such holder has satisfied any conditions, contained in any
agreement or any legend on the certificates representing the No Par Preferred
Stock, Series 2000-A, relating to the transfer thereof, if shares of Common
Stock are to be issued in a name or names other than the holder's, and (iv) pay
any transfer or similar tax if required as provided in Section 8(j) below. As
soon as practical following receipt of the foregoing, the Corporation shall
deliver to such former holder of No Par Preferred Stock, Series 2000-A, a
certificate representing the shares of Common Stock issued upon the conversion,
together with a new certificate representing the unconverted portion, if any, of
the shares of No Par Preferred Stock, Series 2000-A, formerly represented by the
certificate or certificates surrendered for conversion.
(d) For the purposes of the conversion of No Par Preferred Stock, Series
2000-A into Common Stock pursuant to Section 8(a), each share of No Par
Preferred Stock, Series 2000-A shall be convertible into the number of shares of
Common Stock equal to the Liquidation Preference Amount divided by the
Conversion Price in effect on the Conversion Date. The number of full shares of
Common Stock issuable to a single holder upon conversion of the No Par Preferred
Stock, Series 2000-A shall be based on the aggregate Liquidation Preference
Amount of all shares of No Par Preferred Stock, Series 2000-A owned by such
holder. The Conversion Price initially shall equal $35.00. In the event the
Corporation delivers a notice of redemption of the No Par Preferred Stock,
Series 2000-A in accordance with Subsection (B) of Article Second of the
Articles of Incorporation, the Conversion Price shall be adjusted to equal the
lesser of (i) the Conversion Price then in effect and (ii) the Current Market
Price (as hereinafter defined) on the Redemption Notice Date. In order to
prevent dilution of the conversion rights granted hereunder, the Conversion
Price shall be subject to adjustment from time to time in accordance with
Sections 8(e) through 8(h).
(e) The number of shares issuable upon conversion and the Conversion Price
(and each component thereof) are subject to adjustment by the Corporation from
time to time upon the occurrence of the events enumerated in this Section 8;
provided, however, there shall be no such adjustment in connection with a
dividend declared under, or in connection with the implementation of, a
stockholder rights plan which would entitle the Common Stock issuable upon
conversion of the No Par Preferred Stock, Series 2000-A to the same rights as
the Common Stock outstanding on the date of such dividend declaration.
(i) Changes in Capital Stock.
(A) If the Corporation (i) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock, (ii) subdivides, by stock split,
reclassification or otherwise, its outstanding shares of Common Stock into a
greater number of shares, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, (iv) makes a distribution on its Common Stock
in shares of its capital stock other than Common Stock or (v) issues by
reclassification of its Common Stock any shares of its capital stock, then the
Conversion Price (and each component thereof) in effect immediately prior to
such action shall be proportionately adjusted so that each holder of shares of
No Par Preferred Stock, Series 2000-A may receive the aggregate number and kind
of shares of capital stock of the Corporation which such holder would have owned
immediately following such action if such holder had converted all of his shares
of No Par Preferred Stock, Series 2000-A into Common Stock immediately prior to
such action.
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(B) The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
(C) If after an adjustment a holder of shares of No Par Preferred Stock,
Series 2000-A upon conversion may receive shares of two or more classes of
capital stock of the Corporation, the Corporation shall determine the allocation
of the adjusted Conversion Price between the classes of capital stock. After
such allocation, the conversion privilege and the Conversion Price of each class
of capital stock shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Stock in this Section 8(e)(i).
(D) Any adjustments made pursuant to this Section 8(e)(i) shall be made
successively.
(ii) Common Stock Issue.
(A) If the Corporation issues any additional shares of Common Stock for a
consideration per share less than the Current Market Price (as hereinafter
defined) on the date the Corporation fixes the offering price of such additional
shares, the Conversion Price shall be adjusted as set forth below, such that a
holder of shares of No Par Preferred Stock, Series 2000-A, upon conversion of
his shares of No Par Preferred Stock, Series 2000-A into shares of Common Stock,
shall have the right to receive that number of shares of Common Stock which,
after giving effect to the following adjustment, such holder would receive if
such holder elected to convert his shares of No Par Preferred Stock, Series
2000-A into Common Stock. The Conversion Price shall be adjusted to the number
determined by multiplying the Conversion Price in effect immediately prior to
such issuance or sale by a fraction, the numerator of which shall be the sum of
(i) the number of shares of Common Stock outstanding immediately prior to the
issuance or sale of such additional shares of Common Stock plus (ii) the number
of such additional shares which the aggregate consideration received (or by
express provision hereof deemed to have been received) by the Corporation for
such additional shares so issued or sold would purchase at a consideration per
share equal to the Current Market Price, and the denominator of which shall be
the number of shares of Common Stock outstanding immediately after the issuance
or sale of such additional shares of Common Stock. For the purposes of this
Section 8(e)(ii), the date as of which the Current Market Price shall be
determined shall be the date of the actual issuance or sale of such shares.
(B) The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
(C) This Section 8(e)(ii) does not apply to: (i) any of the transactions
described in Sections 8(e)(i), 8(e)(iii) and 8(e)(iv), (ii) the conversion of
the shares of No Par Preferred Stock, Series 2000-A, (iii) up to 2,300,000
shares of Common Stock (as adjusted for stock splits, reverse stock splits,
stock dividends and reclassifications) to be issued to officers, directors,
employees, consultants and advisors of the Corporation and its subsidiaries
pursuant to stock purchase, 401(k) or stock option plans or agreements or other
incentive stock arrangements approved by the Board of Directors of the
Corporation, (iv) shares of Common Stock issued in an arms-length transaction to
either acquire another business or other properties or assets as approved by the
Board of Directors of the Corporation wherein the Board of Directors has
determined that the fair market value of the Common Stock issued in connection
with such acquisition does not exceed the fair market value of the business,
properties and assets acquired, (v) the issuance and sale of Common Stock in an
underwritten public offering, and (vi) the issuance and sale of Common Stock
pursuant to a dividend reinvestment plan of the Corporation.
(iii) Rights Issue.
(A) If the Corporation issues or sells any warrants or options or other
rights entitling the holders of Common Stock to subscribe for or purchase either
any additional shares of Common Stock or evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for additional
shares of Common Stock (such convertible or exchangeable evidence of
indebtedness, shares of stock or other securities hereinafter being called
"Convertible Securities"), and the consideration per share for which additional
shares of Common Stock may at any time thereafter be issuable pursuant to such
warrants, options or other rights or pursuant to the terms of such Convertible
Securities (when added to the consideration per share of Common Stock, if any,
received for such warrants, options or other rights), shall be less than the
Current Market Price at the time of the issuance of the warrants, options or
other rights, then the Conversion Price shall be adjusted as provided below,
such that a holder of shares of the No Par Preferred Stock, Series 2000-A, upon
conversion of his shares of No Par Preferred Stock, Series 2000-A into shares of
Common Stock, shall have the right to receive that number of shares of Common
Stock which, after giving effect to the following adjustment, such holder would
receive if such holder elected to convert his shares of No Par Preferred Stock,
Series 2000-A into Common Stock. The Conversion Price shall be adjusted to the
number determined by multiplying the current Conversion Price by a fraction, (A)
the numerator of which shall be the sum of (i) the number of shares of Common
Stock outstanding on the record date plus (ii) the quotient of (x) the number of
additional shares of Common Stock covered by such warrants, options or rights,
multiplied by the sales price per share of additional shares covered by such
warrants, options or other rights, divided by (y) the Current Market Price per
share of Common Stock on the record date, and (B) the denominator of which shall
be the sum of (i) the number of shares of Common Stock outstanding on the record
date and (ii) the number of additional shares of Common Stock covered by such
warrants, options or other rights. For purposes of this Section 8(e)(iii), the
foregoing adjustment shall be made on the basis that (i) the maximum number of
additional shares of Common Stock issuable pursuant to all such warrants,
options or other rights or necessary to effect the conversion or exchange of all
such Convertible Securities shall be deemed to have been issued and (ii) the
aggregate consideration for such maximum number of additional shares shall be
deemed to be the minimum consideration received and receivable by the
Corporation for the issuance of such additional shares (plus the consideration,
if any, received for such warrants, options or other rights) pursuant to such
warrants, options or other rights or pursuant to the terms of such Convertible
Securities.
(B) The adjustment shall be made successively whenever any such warrants,
options or other rights are issued and shall become effective immediately after
the record date for the determination of shareholders entitled to receive the
warrants, options or other rights.
(C) This Section 8(e)(iii) does not apply to (i) the conversion of the
shares of No Par Preferred Stock, Series 2000-A and (ii) the issuance of options
or other rights to purchase shares of Common Stock referenced in Section
8(e)(ii)(C)(iii).
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(iv) Convertible Securities Issue.
(A) If the Corporation issues Convertible Securities (other than securities
issued in transactions described in Section 8(e)(iii)) and the consideration per
share for which additional shares of Common Stock may at any time thereafter be
issuable pursuant to the terms of such Convertible Securities is less than the
Current Market Price on the date of issuance of such securities, the Conversion
Price shall be adjusted as provided below, such that a holder of shares of No
Par Preferred Stock, Series 2000-A, upon conversion of his shares of No Par
Preferred Stock, Series 2000-A into shares of Common Stock, shall have the right
to receive that number of shares of Common Stock which, after giving effect to
the following formula, such holder would receive if such holder elected to
convert his shares of No Par Preferred Stock, Series 2000-A into Common Stock.
The Conversion Price shall be adjusted to the number determined by multiplying
the current Conversion Price by a fraction, (A) the numerator of which shall be
the sum of (i) the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities and (ii) the quotient of (x) the
aggregate consideration received for the issuance of such securities, divided by
(y) the Current Market Price per share on the date of issuance of such
securities and (B) the denominator of which shall be the sum of (i) the number
of shares of Common Stock outstanding immediately prior to the issuance of such
securities and (ii) the maximum number of shares deliverable upon conversion or
in exchange for such securities at the initial conversion or exchange rate. The
adjustment shall be made on the basis that (i) the maximum number of additional
shares of Common Stock necessary to effect the conversion or exchange of all
such Convertible Securities shall be deemed to have been issued and (ii) the
aggregate consideration for such maximum number of additional shares of Common
Stock shall be deemed to be the minimum consideration received and receivable by
the Corporation for the issuance of such additional shares pursuant to the terms
of such Convertible Securities. No adjustment of the Conversion Price shall be
made under this Section 8(e)(iv) upon the issuance of any Convertible Securities
which are issued pursuant to the exercise of any warrants or other subscription
or purchase rights therefor, if such adjustment shall previously have been made
upon the issuance of such warrants or other rights pursuant to Section
8(e)(iii).
(B) The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
(C) This Section 8(e)(iv) does not apply to the conversion of the shares of
No Par Preferred Stock, Series 2000-A.
(v) Conversion Price Date. For purposes of Sections 8(e)(iii) and 8(e)(iv),
the date as of which the Conversion Price shall be computed shall be the
earliest of (i) the date on which the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive any
warrants or other rights referred to in Section 8(e)(iii) or to receive any
Convertible Securities, (ii) the date on which the Corporation shall enter into
a firm contract for the issuance of such warrants or other rights or Convertible
Securities or (iii) the date of the actual issuance of such warrants or other
rights or Convertible Securities.
(vi) No Compound Adjustment. No adjustment of the Conversion Price shall be
made under Section 8(e)(ii) upon the issuance of any additional shares of Common
Stock which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any Convertible Securities, if such adjustment shall
previously have been made upon the issuance of such warrants or other rights or
upon the issuance of such Convertible Securities (or upon the issuance of any
warrants or other rights therefor), pursuant to Sections 8(e)(iii) and 8(e)(iv).
(vii) Readjustment. If any warrants or other rights (or any portions
thereof) which shall have given rise to an adjustment pursuant to Section
8(e)(iii) or conversion rights pursuant to Convertible Securities which shall
have given rise to an adjustment pursuant to Section 8(e)(iv) shall have expired
or terminated without the exercise thereof and/or if by reason of the terms of
such warrants or other rights or Convertible Securities there shall have been an
increase or increases, with the passage of time or otherwise, in the price
payable upon the exercise or conversion thereof, then the Conversion Price
hereunder shall be readjusted (but to no greater extent than originally
adjusted), taking into account all transactions described in Sections 8(e)(i)
through 8(e)(iv) hereof that have occurred in the interim, on the basis of (i)
eliminating from the computation any additional shares of Common Stock
corresponding to such warrants or other rights or conversion rights as shall
have expired or terminated, (ii) treating the additional shares of Common Stock,
if any, actually issued or issuable pursuant to the previous exercise of such
warrants or other rights or of conversion rights pursuant to any Convertible
Securities as having been issued for the consideration actually received and
receivable therefor and (iii) treating any of such warrants or other rights or
conversion rights pursuant to any Convertible Securities which remain
outstanding as being subject to exercise or conversion on the basis of such
exercise or Conversion Price as shall be in effect at the time; provided,
however, that any consideration which was actually received by the Corporation
in connection with the issuance or sale of such warrants or other rights shall
form part of the readjustment computation even though such warrants or other
rights shall have expired or terminated without the exercise thereof.
(viii) Consideration Received. To the extent that any additional shares of
Common Stock, any warrants, options or other rights to subscribe for or purchase
any additional shares of Common Stock, or any Convertible Securities shall be
issued for cash consideration, the consideration received by the Corporation
therefor shall be deemed to be the amount of the cash received by the
Corporation therefor, or, if such additional shares, warrants, options or other
rights or Convertible Securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price, in
any such case excluding any amounts paid or receivable for accrued interest or
accrued dividends and without deduction of any compensation, discounts or
expenses paid or incurred by the Corporation for and in the underwriting of, or
otherwise in connection with, the issuance thereof. If and to the extent that
such issuance shall be for a consideration other than cash, then, except as
herein otherwise expressly provided, the amount of such consideration shall be
deemed to be the fair value of such consideration at the time of such issuance
as determined by the Board of Directors of the Corporation. If additional shares
of Common Stock shall be issued as part of a unit with warrants or other rights,
then the amount of consideration for the warrant or other right shall be deemed
to be the amount determined at the time of issuance by the Board of Directors of
the Corporation. If the Board of Directors of the Corporation shall not make any
such determination, the consideration for the warrant, option or other right
shall be deemed to be zero.
(ix) Other Conversions. If a state of facts shall occur which, without
being specifically controlled by the provisions of this Section 8, would not
fairly protect the conversion rights of the holders of shares of No Par
Preferred Stock, Series 2000-A in accordance with the essential intent and
principles of such provisions, then the Board of Directors of the Corporation
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so to protect such conversion rights.
(x) De Minimis Adjustment. Anything herein to the contrary notwithstanding,
no adjustment in the Conversion Price shall be required unless such adjustment,
either by itself or with other adjustments not previously made, would require a
change of at least one percent (1%) in the Conversion Price; provided, however,
that any adjustment which by reason of this Section 8(e)(x) is not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 8 shall be made to the nearest
one-tenth of a cent ($.001) (rounded to the nearest cent ($.01) with respect to
any monetary amount to be actually paid) or to the nearest one hundredth (0.01)
of a share, as the case may be.
<PAGE>
(xi) Current Market Price. For the purpose of any computation hereunder,
the "Current Market Price" on any date will be the average of the last reported
sale prices per share (the "Quoted Price") of the Common Stock on each of the
fifteen consecutive Trading Days (as defined below) preceding the date of the
computation. The Quoted Price of the Common Stock on each day will be (A) the
last reported sales price of the Common Stock on the principal stock exchange on
which the Common Stock is listed, or (B) if the Common Stock is not listed on a
stock exchange, the last reported sales price of the Common Stock on the
principal automated securities price quotation system on which sale prices of
the Common Stock are reported, or (C) if the Common Stock is not listed on a
stock exchange and sale prices of the Common Stock are not reported on an
automated quotation system, the mean of the high bid and low asked price
quotations for the Common Stock as reported by National Quotation Bureau
Incorporated if at least two securities dealers have inserted both bid and asked
quotations for the Common Stock on a day will be the Quoted Price of the Common
Stock on that day as determined by a member firm of the New York Stock Exchange,
Inc. selected by the Board of Directors. If no two securities dealers have
inserted such bid and ask quotations, or such Quoted Prices otherwise are not
available, the Current Market Price means the fair market value of the Common
Stock as of the date prior to the date on which the Current Market Price is
determined, which such fair market value shall be determined by the Board of
Directors of the Corporation. As used with regard to the No Par Preferred Stock,
Series 2000-A, the term "Trading Day" means (x) if the Common Stock is listed on
at least one stock exchange, a day on which there is trading on the principal
stock exchange on which the Common Stock is listed, (y) if the Common Stock is
not listed on a stock exchange, but sale prices of the Common Stock are reported
on an automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the Common Stock is not listed on a stock exchange and sale
prices of the Common Stock are not reported on an automated quotation system, a
day on which quotations are reported by National Quotation Bureau Incorporated.
(f) No fractional shares of Common Stock shall be issued upon the
conversion of No Par Preferred Stock, Series 2000-A. If any fractional interest
in a share of Common Stock would, except for the provisions of this subparagraph
(f), be deliverable upon the conversion of any No Par Preferred Stock, Series
2000-A, the Corporation shall, in lieu of delivering the fractional share
therefor, adjust such fractional interest by payment to the holder of such
converted No Par Preferred Stock, Series 2000-A of an amount in cash equal
(computed to the nearest cent) to the Current Market Price of such fractional
interest on the Conversion Date.
(g) Whenever the Conversion Price is adjusted, as herein provided, the
Corporation shall promptly mail a notice of the adjustment to holders of No Par
Preferred Stock, Series 2000-A. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of the action resulting in
the adjustment to the Conversion Price. The Corporation shall forthwith maintain
at its principal executive office and file with the transfer agent, if any, for
No Par Preferred Stock, Series 2000-A, a statement, signed by the Chairman of
the Board, or the President, or a Vice President of the Corporation and by its
chief financial officer or an Assistant Treasurer, showing in reasonable detail
the facts requiring such adjustment and the Conversion Price after such
adjustment. Such transfer agent shall be under no duty or responsibility with
respect to any such statement except to exhibit the same from time to time to
any holder of No Par Preferred Stock, Series 2000-A desiring an inspection
thereof.
(h) If there shall occur any capital reorganization or any reclassification
of the capital stock of the Corporation, consolidation or merger of the
Corporation with or into another entity, or the conveyance of all or
substantially all of the assets of the Corporation to another person or entity,
each share of No Par Preferred Stock, Series 2000-A shall thereafter be
convertible into the number of shares or other securities or property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of such No Par Preferred Stock, Series 2000-A would have been
entitled upon such reorganization, reclassification, consolidation, merger or
conveyance; and, in any such case, appropriate adjustment (as determined in good
faith in the sole discretion of the Board of Directors of the Corporation) shall
be made in the application of the provisions herein set forth with respect to
the rights and interests thereafter of the holders of the No Par Preferred
Stock, Series 2000-A, to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the Conversion
Price) shall be applicable, as nearly as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the conversion of the No
Par Preferred Stock, Series 2000-A.
<PAGE>
(i) The Corporation shall at all times reserve and keep available, out of
its authorized but unissued shares of Common Stock or treasury shares thereof,
solely for the purpose of issuance upon the conversion of No Par Preferred
Stock, Series 2000-A, the full number of shares of Common Stock deliverable upon
the conversion of all No Par Preferred Stock, Series 2000-A from time to time
outstanding. The Corporation shall from time to time, in accordance with the
laws of the State of South Dakota, take all action within its power required to
increase the authorized amount of its Common Stock if at any time the authorized
number of shares of Common Stock remaining unissued shall not be sufficient to
permit the conversion of all of the No Par Preferred Stock, Series 2000-A at the
time outstanding.
(j) The Corporation shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon conversion of the
No Par Preferred Stock, Series 2000-A into Common Stock. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any security in a name other than
that in which the No Par Preferred Stock, Series 2000-A so converted was
registered, and no such issue or delivery shall be made unless and until the
person who requested such issue has paid to the Corporation the amount of any
such tax, or has established to the satisfaction of the Corporation that such
tax has been paid.
9. Exclusion of Other Rights.
Except as otherwise required by law, shares of No Par Preferred Stock,
Series 2000-A shall not have any preferences or relative, participating,
optional or other special rights, other than those specifically set forth in
this resolution and in the Statement of Designations filed pursuant hereto (as
such Statement may be amended from time to time) and in the Articles of
Incorporation.
10. Reissuance of No Par Preferred Stock, Series 2000-A.
Shares of No Par Preferred Stock, Series 2000-A that have been issued and
reacquired in any manner, including shares purchased, redeemed, converted or
exchanged, shall (upon compliance with any applicable provisions of South Dakota
Codified Laws) have the status of authorized and unissued shares of No Par
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of No Par Preferred Stock, except No Par Preferred Stock,
Series 2000-A.
11. No Retirement Fund; Waivers.
The Corporation shall not be required to set aside any funds as a
retirement fund. To the extent applicable, any rights that the holders of the No
Par Preferred Stock, Series 2000-A may have under the Articles of Incorporation
with respect to a dividend declared under a stockholder rights plan or in
connection with the implementation of a stockholder rights plan are waived.
12. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
<PAGE>
13. Severability of Provisions.
If any right, preference or limitation of the No Par Preferred Stock,
Series 2000-A set forth in this resolution and in the Statement of Designations
for the No Par Preferred Stock, Series 2000-A (as such Statement may be amended
from time to time) is invalid, unlawful or incapable of being enforced by reason
of any rule or law or public policy, all other rights, preferences and
limitations set forth in such Statement of Designations (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right, preference or limitation unless so
expressed herein.
14. Notice.
All notices and other communications required or permitted to be given to
the Corporation hereunder shall be made by hand delivery or registered or
certified mail, return receipt requested, to the Corporation at its principal
executive offices (currently located on the date of the adoption of these
resolutions at Black Hills Corporation, 625 Ninth Street, P.O. Box 1400, Rapid
City, South Dakota 57709), Attention: Corporate Secretary. Minor imperfections
in any such notice shall not affect the validity thereof.
IN WITNESS WHEREOF, Black Hills Corporation has caused this statement
to be signed by Roxann R. Basham, its Vice President - Controller and Corporate
Secretary, this 22nd day of December, 2000.
BLACK HILLS CORPORATION,
a South Dakota corporation
By: /s/ Roxann R. Basham
Name: Roxann R. Basham
Title: Vice President - Controller and
Corporate Secretary
STATE OF SOUTH DAKOTA
COUNTY OF PENNINGTON
On the 22nd day of December, 2000, before me, the undersigned officer,
personally appeared Roxann R. Basham, who acknowledged herself to be the Vice
President - Controller and Corporate Secretary of Black Hills Corporation, a
South Dakota corporation, and that she, as such Vice President - Controller and
Corporate Secretary, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by herself as Vice President - Controller and Corporate Secretary.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Rhonda R. Lingle
Notary Public
(SEAL)
