<PAGE>
BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South Dakota 57701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 1995
To the Shareholders of
Black Hills Corporation
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
holders of Common Stock of BLACK HILLS CORPORATION (herein called
the Company) will be held at the Holiday Inn Rushmore Plaza
Hotel, 505 North Fifth Street, Rapid City, South Dakota, on
Tuesday, May 23, 1995, commencing at 9:30 A.M., for the following
purposes:
1. To elect three Class III Directors to serve
until the Annual Meeting of Shareholders in
1998;
2. To consider and act upon an amendment to the
Employee Stock Purchase Plan to allow the
issuance of an additional 200,000 shares
pursuant to the Plan;
3. To ratify the appointment of Arthur Andersen
LLP to serve as independent auditors of the
Company for the year 1995;
4. To transact such other business as may
properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on
April 7, 1995, are entitled to notice of and to vote at the
meeting or any adjournment thereof.
All shareholders are cordially invited to attend the
meeting. Please complete, date, sign, and return the
accompanying form of proxy. A return envelope is enclosed which
requires no postage if mailed in the United States. We
appreciate your giving this matter your prompt attention.
By Order of the Board of Directors
ROXANN R. BASHAM
Corporate Secretary
Dated: April 14, 1995
<PAGE>
BLACK HILLS CORPORATION
625 Ninth Street
Rapid City, South Dakota 57701
PROXY STATEMENT
A proxy in the accompanying form is solicited by the Board
of Directors of Black Hills Corporation, a South Dakota
corporation (the Company), to be voted at the Annual Meeting of
Shareholders of the Company to be held Tuesday, May 23, 1995, and
at any adjournment thereof.
The enclosed form of proxy, when executed and returned,
will be voted as set forth therein. Any shareholder signing a
proxy has the power to revoke the same in writing, addressed to
the Secretary of the Company, or in person at the meeting at any
time before the proxy is exercised.
All shares represented by valid, unrevoked proxies will be
voted at the Annual Meeting. Shares voted as abstentions on any
matter (or as "withhold authority" as to Directors) will be
counted as shares that are present and entitled to vote for
purposes of determining the presence of a quorum at the meeting
and as unvoted, although present and entitled to vote, for
purposes of determining the approval of each matter as to which
the shareholder has abstained. If a broker submits a proxy which
indicates that the broker does not have discretionary authority
as to certain shares to vote on one or more matters, those shares
will be counted as shares that are present and entitled to vote
for purposes of determining the presence of a quorum at the
meeting, but will not be considered as present and entitled to
vote with respect to such matters.
The Company will bear all costs of the solicitation. In
addition to solicitation by mail, officers and employees of the
Company may solicit proxies by telephone, telegraph, or in
person. Chemical Bank has been retained by the Company to assist
in the solicitation of proxies at an anticipated cost of $3,000.
Also, the Company will, upon request, reimburse brokers or other
persons holding stock in their names or in the names of their
nominees for reasonable expenses in forwarding proxies and proxy
material to the beneficial owners of stock.
This Proxy Statement and the accompanying form of proxy
are to be first mailed on April 14, 1995. The Company's Annual
Report for the year 1994 has been mailed to shareholders.
<PAGE>
VOTING RIGHTS AND PRINCIPAL HOLDERS
Only shareholders of record at the close of business on
April 7, 1995, will be entitled to vote at the meeting. The
outstanding voting stock of the Company as of such record date
consisted of 14,399,436 shares of Common Stock.
Each outstanding share of Common Stock is entitled to one
vote. Cumulative voting is permitted in the election of
directors. Each share is entitled to three votes, one each for
the election of three directors, and the three votes may be cast
for a single person or may be distributed among two or three
persons.
The Company is not aware of any person or group who is the
beneficial owner of more than five percent of the Company's
Common Stock.
ITEM I
ELECTION OF DIRECTORS
In accordance with the Bylaws and Article Fifth of the
Restated Articles of Incorporation, the Company's directors are
elected to three classes of staggered terms consisting of three
years each. At this Annual Meeting of Shareholders, three
directors will be elected to Class III of the Board of Directors
to hold office for a term of three years until the Annual Meeting
of Shareholders in 1998 and until their respective successors
shall be duly elected and qualified.
The terms of Michael B. Enzi, Everett E. Hoyt, and Charles
T. Undlin expire at the time of the 1995 Annual Meeting. Mr.
Undlin has elected not to stand for re-election.
The Board of Directors has nominated Kirk E. Dean for
election as Director to succeed Mr. Undlin and nominated the
re-election of Michael B. Enzi and Everett E. Hoyt to each serve
a three-year term ending at the time of the Annual Meeting in
1998.
The proxy attorneys will vote your stock for the election
of the three nominees for director listed below, unless otherwise
instructed. If, at the time of the meeting, any of such nominees
shall be unable to serve in the capacity for which they are
nominated or for good cause will not serve, an event which the
Board of Directors does not anticipate, it is the intention of
the persons designated as Proxy Attorneys to vote, at their
discretion, for nominees to replace those who are unable to
serve. The affirmative vote of a majority of the common shares
present and entitled to vote with respect to the election of
directors is required for the election of the nominees to the
Board of Directors.
<PAGE>
The following information, including principal occupation
or employment for the past five or more years, is furnished with
respect to each of the following persons who are nominated as
Class III directors, each to serve for a term of three years to
expire in 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE FOLLOWING NOMINEES:
Nominees for Election Until
1998 Annual Meeting - Class III
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
Kirk E. Dean, 47 --
President, Rapid City Market,
Norwest Bank South Dakota, N.A.
Rapid City, South Dakota
Michael B. Enzi, 51 1992
Accounting Manager, Dunbar Well Service,
Inc. (an oil well servicing company),
Gillette, Wyoming; Wyoming State Senator,
Campbell County, Wyoming; President of NZ
Shoes, Inc. (retail shoe store), Gillette,
Wyoming
Everett E. Hoyt, 55 1991
President and Chief Operating Officer of
Black Hills Power and Light Company since
October 1, 1989
<PAGE>
Directors Whose Terms Expire at
1996 Annual Meeting - Class I
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
Glenn C. Barber, 61 1984
President and General Manager, Glenn
C. Barber & Associates Inc. (a general
construction company)
Bruce B. Brundage, 59 1986
President and Director, Brundage &
Company (a firm specializing in corporate
financing), Englewood, Colorado; Director,
Vicorp Restaurants, Inc., Denver, Colorado
Kay S. Jorgensen, 44 1992
Concessionaire, Black Hills Passion Play,
Spearfish, South Dakota; South Dakota
Legislative Representative, Lawrence County,
South Dakota
<PAGE>
Directors Whose Terms Expire at
1997 Annual Meeting - Class II
Name, Age, Principal Occupation for Director
Last Five Years and Other Directorships Since
Daniel P. Landguth, 48 1989
Chairman, President, and Chief Executive
Officer of the Company since January 1,
1991; President and Chief Operating
Officer of Black Hills Corporation from
October 1989
Dale E. Clement, 61 1979
Senior Vice President-Finance of the Company
and subsidiaries since September 1, 1989
John R. Howard, 54 1977
President, Industrial Products, Inc. (an
industrial parts distributor) since
March 2, 1992; General Manager of Black
Hills Packing Co. (a meat processing
concern), Rapid City, South Dakota, from
December 1978 to June 1, 1991; Director,
Norwest Bank-South Dakota, N.A.
<PAGE>
Security Ownership of Management
The following table sets forth information, as of December
31, 1994, with respect to beneficial ownership of Common Stock of
the Company for each Director, each executive officer named in
the Summary Compensation table herein, and all Directors and
executive officers of the Company as a group.
Number of Shares and Nature
Name of Beneficial Owner Of Beneficial Ownership <F1>
Glenn C. Barber 3,011
Bruce B. Brundage 3,615<F2>
Dale E. Clement 10,197
Kirk E. Dean 186
Michael B. Enzi 1,354<F3>
John R. Howard 11,102
Everett E. Hoyt 4,705<F4>
Kay S. Jorgensen 513
Daniel P. Landguth 8,679<F4>
Charles T. Undlin 8,356
All Directors and executive
officers as a group 56,872<F4>
<F1> Represents outstanding Common Stock beneficially owned
both directly and indirectly as of December 31, 1994. The Common
Stock interest of each named person and all Directors and
executive officers as a group represents less than one percent of
the aggregate amount of Common Stock issued and outstanding.
Except as indicated by footnote below, the beneficial owner
possesses sole voting and investment powers with respect to the
shares shown.
<F2> Includes 3,600 shares owned by Brundage & Co. Pension
Plan and Trust which Mr. Brundage is the Trustee and has sole
voting and investment power.
<F3> Includes 100 shares owned jointly with Mr. Enzi's son
as to which he shares voting and investment power and 106 shares
for which Mr. Enzi is custodian of his minor daughter.
<F4> Includes Common Stock held by the Trustee of the
Company's Retirement Savings Plan (401K) of which the Trustee has
sole voting and investment power as follows: Mr. Hoyt 3,949
shares, Mr. Landguth 2,875 shares, and all Directors and
executive officers as a group 9,218 shares.
<PAGE>
The Board and Committees
The Executive Committee is comprised of Glenn C. Barber,
Bruce B. Brundage, John R. Howard, Daniel P. Landguth, and
Charles T. Undlin, with Mr. Landguth serving as Chairman. The
Committee exercises the authority of the Board of Directors in
the interval between meetings of the Board, recommends to the
Board of Directors persons to be elected as officers, and
recommends persons to be appointed to Board Committees. The
Executive Committee held three meetings during 1994.
The Compensation Committee is comprised of Glenn C.
Barber, Bruce B. Brundage, Michael B. Enzi, John R. Howard,
Kay S. Jorgensen, and Charles T. Undlin, with Mr. Barber serving
as Chairman. The Committee performs functions required by the
Board of Directors in the administration of all federal and state
statutes relating to employment and compensation, recommends to
the Board of Directors compensation for officers, and considers
and approves the Company's compensation program including
benefits and stock ownership plans. The Compensation Committee
held two meetings in 1994.
The Audit Committee is comprised of Bruce B. Brundage,
Michael B. Enzi, John R. Howard, and Kay S. Jorgensen, with
Mr. Howard serving as Chairman. The Committee annually
recommends to the Board of Directors an independent accounting
firm to be appointed by the Board for ratification by the
shareholders, reviews the scope and results of the annual audit
including reports and recommendations of the firm, reviews the
Company's internal audit function, and periodically confers with
the internal audit group, management of the Company, and its
independent accountants. The Audit Committee held two meetings
in 1994.
The Nominating Committee is comprised of Glenn C. Barber,
John R. Howard, Daniel P. Landguth, and Charles T. Undlin, with
Mr. Howard serving as Chairman. The Committee recommends to the
Board of Directors persons to be nominated as directors or to be
elected to fill vacancies on the Board. The Bylaws require that
an outside director serve as Chairman of the Committee. The
Nominating Committee held one meeting in 1994.
Pursuant to the Company's Bylaws, nominations from
shareholders for Board membership will be considered by the
Nominating Committee. Shareholders who wish to submit names for
future consideration for Board membership should do so in writing
prior to November 25, 1995, addressed to Nominating Committee,
c/o Corporate Secretary, Black Hills Corporation, P.O. Box 1400,
Rapid City, South Dakota 57709.
Members of the Committees referred to herein are
designated by the Board of Directors upon recommendation of the
<PAGE>
Executive Committee each year at a meeting held following the
Annual Meeting of Shareholders.
The Board of Directors held ten meetings during 1994.
Each director attended no less than 80 percent of the aggregate
of the total number of Board meetings and Committee meetings on
which the director served.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is solely comprised of the
following outside directors, Glenn C. Barber, Bruce B. Brundage,
Michael B. Enzi, John R. Howard, Kay S. Jorgensen, and
Charles T. Undlin.
Mr. Howard is also a director of Norwest Bank - South
Dakota, N.A. Mr. Dean is President of the Rapid City Market -
Norwest Bank South Dakota, N.A., of which the Company has a $15
million line of credit. During 1994, Norwest Bank - South
Dakota, N.A. participated in short-term loans to the Company of
up to $14.7 million at an interest rate of 1/8 percent less than
the prime rate.
Directors' Fees
Directors who are not officers of the Company receive an
annual fee of $12,000 plus a fee of $600 for each board meeting
and committee meeting attended providing such committee meetings
are substantive in nature and content.
Directors' Retirement Plan
The Company has a Retirement Plan for those directors who
are not otherwise employed by the Company (outside directors).
The monthly benefit is $1,000 payable for the number of months
the outside director served or for 120 months, whichever is less.
The monthly benefits commence at the earliest of (1) the first
full complete month the outside director is 60 years of age or
more and is no longer a director of the Company or (2) the first
full month after the death of the outside director or former
outside director. The Board of Directors may withdraw retirement
benefits for any outside director dismissed for cause. The
monthly benefit is paid to the participating director, or if
deceased, the director's designated beneficiary, and if none, his
or her estate.
<PAGE>
Executive Compensation
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is
responsible for developing and making recommendations to the
Board on executive compensation. The components of the Company's
executive compensation program consists of a base salary, an
incentive gainsharing bonus and results compensation. The mix of
base salary, incentive bonus, and results compensation reflects
the Company's goals of attracting and retaining highly qualified
and motivated managers, recognizing and rewarding outstanding
performance, fostering a cohesive management team, and having a
portion of compensation contingent upon the performance of the
Company.
The Committee makes annual recommendations to the Board
concerning the base salary, incentive gainsharing bonus, and
results compensation for the Chief Executive Officer and each of
the other executive officers of the Company. Recognizing a
market based compensation structure, the Committee strives to
ensure that competitive salary ranges and base salaries are being
maintained. In the later part of 1992, the Compensation
Committee hired Hewitt Associates, an internationally recognized
compensation consultant firm, to review the executive and
director compensation being paid at the Company. Data collected
for that 1992 review was again utilized in 1994, aged for the
passage of time.
Utilizing the data from the Hewitt Associates study and
comparing it to data from the Edison Electric Institute, the
trade association of investor-owned electric utilities, the
Committee recommended to the Board the base salary for the Chief
Executive Officer as well as for the other executive officers.
The salaries were not only based upon comparable market salary
information but also on the accomplishments of individual
performance objectives.
The Company's position is to establish a market salary
level for each salary range that is at or near the median (50th
percentile) of the range of salaries of comparable companies
surveyed. A performance matrix system is used in determining the
percentage of salary increase taking into account the performance
rating for the individual officer and the relationship of the
officers current salary to market. An outstanding performance
rating is given when there is extraordinary and exceptional
accomplishment, results are far in excess of requirements, and
demanding objectives are attained. A superior performance rating
indicates results are well above the expected level and the
individual was successful in accomplishing challenging
objectives. Competent performance ratings are given when all
<PAGE>
position requirements are met, the individual consistently
performs the job in a satisfactory manner, and realistic
objectives are obtained. Base salary increases in 1994 for the
Company's officers ranged from 2 percent to 5 percent.
In April 1994, the Compensation Committee granted the
Chief Executive Officer a superior rating based on efforts made
in commencing construction on the new power plant, a successful
common equity sale, the increase in dividends, and maintenance of
earnings. The Compensation Committee approved a 5 percent base
salary increase in the amount of $9,176 for the Chief Executive
Officer. The increase to the base salary brings the Chief
Executive Officer's base salary to 98 percent of market as
determined by wage surveys. Consolidated earnings per share in
1993 was $1.66 compared to $1.73 in 1992. However, 1992 earnings
included a $0.07 per share non-recurring after-tax non-cash gain.
Without this gain in 1992, earnings per share would have been flat
with 1 percent more average shares outstanding. Dividends
increased 3.2 percent over 1992.
The Company currently maintains a variety of employee
benefit plans and programs in which its executive officers may
participate, including the gainsharing program, the results
compensation program, the retirement savings (401k) plan, the
pension plan, and the pension equalization plan. With the
exception of the Pension Equalization Plan (PEP), these benefit
plans and programs are generally available to all employees
within the Company.
The Executive Gainsharing Program is one of three sections
of a Company wide program. The goals of the Executive
Gainsharing Program support the interests of the customer and
shareholder. This is accomplished through increased cost
containment and operating efficiencies which in the end result
reduce costs and increase earnings. The program for 1994 which
paid a 2 to 3 percent gainshare award in 1995 consisted of a
safety goal, a reduction in budgeted operating expenses, and a
goal related to the new power plant.
The Results Compensation Program began in 1994 and was
designed to recognize and reward the contribution that group
performance makes to corporate success. All regular full-time
and regular part-time non-union employees are eligible to
participate in the program. The local union IBEW, 1250, elected
not to participate in the Results Compensation Program. The
program has two key financial goals, a business unit goal and a
corporate goal. The business unit goal is based upon the
percentage of operating income for the respective business unit
which exceeds budgeted amounts. The corporate goal is based upon
the percentage of consolidated earnings per share which exceeds
budgeted amounts. Each goal is weighted 50 percent and must
exceed 5 percent of budgeted amounts before a bonus is paid. The
maximum bonus which can be paid is 8 percent. The executive
<PAGE>
officers earned a 2.25 percent results compensation bonus in 1994
which was paid in 1995. Company wide bonuses ranged from 2
percent to 6.20 percent.
It is the objective of the Company to pay its executives a
fair salary, based on the comparable pay of similar types of
companies in relation to achieving corporate, business unit, and
individual performance objectives. The Company does not offer
any restricted stock awards, stock options, or other long-term
incentive compensation plans. Furthermore, officers are not
permitted to serve on the Board of Directors of any other
corporation operating for profit. The intent of the latter is
that if the executives are paid fairly, the Company and its
shareholders should demand their full attention and, therefore,
their efforts are totally directed toward the Company and not
interrupted by the obligations of serving as a director for other
for profit corporations.
COMPENSATION COMMITTEE
Glenn C. Barber, Chairman Bruce B. Brundage Michael B. Enzi
John R. Howard Kay S. Jorgensen Charles T. Undlin
<PAGE>
The following table is furnished for the fiscal year ended
December 31, 1994, with respect to the Chief Executive Officer of
the Company and the executive officers whose salary and bonus
compensation for 1994 exceeded $100,000.
SUMMARY COMPENSATION TABLE
Name and Principal Annual Compensation
Position Year Salary Bonus<F1>
Daniel P. Landguth 1994 $188,110 $10,180
Chairman, President, and 1993 178,466 10,761
Chief Executive Officer of 1992 173,134 18,250
the Company and subsidiaries
Everett E. Hoyt 1994 $128,365 $ 6,945
President and Chief Operating 1993 123,566 3,906
Officer of Black Hills Power 1992 121,008 5,791
and Light Company
Dale E. Clement 1994 $127,363 $ 5,582
Senior Vice President - 1993 124,266 3,966
Finance of the Company and 1992 122,430 5,612
Subsidiaries
<F1> Bonus amounts for 1994 include amounts earned under the
Results Compensation Program and the Incentive Gainshare Program,
cash bonus programs for Company employees based on the attainment
of predetermined profitability measures. Bonus amounts for 1993
include amounts earned under the Incentive Gainshare Program.
Mr. Landguth's bonus in 1993 also includes a one-time performance
bonus of $4,900. Bonus amounts for 1992 include amounts earned
under the Incentive Gainshare Program and lump sum payments that
were received in lieu of base salary increases.
<PAGE>
Retirement Plans
The Company has a defined benefit retirement plan
(Retirement Plan) for its employees. The Retirement Plan
provides benefits at retirement based on length of employment
service and average monthly pay in the five consecutive calendar
years of highest earnings out of the last ten years. Employees
do not contribute to the Retirement Plan. The amount of annual
contribution by the employers to the Retirement Plan is based on
an actuarial determination. Accrued benefits become 100 percent
vested after an employee completes five years of service.
The Company also has a Pension Equalization Plan (the
PEP), a nonqualified supplemental plan, which is designed to
provide the higher paid executive employee a retirement benefit
which, when added to social security benefits and the pension to
be received from the Retirement Plan, will approximate retirement
benefits being paid by other employers to its employees with like
executive positions. The employee's pension from the qualified
pension plan is limited under the current law to not exceed
$120,000 annually and the compensation taken into account in
determining contributions and benefits cannot exceed $150,000.
The amounts of deferred compensation paid under nonqualified
plans such as the PEP are not subject to the limits. A
participant under the PEP does not qualify for benefits until the
benefits become vested under a vesting schedule - 20 percent
after three years of employment under the plan increasing up to
100 percent vesting after eight years of employment under the
plan. No credit for past service is granted under the PEP. The
annual benefit is 25 percent of the employee's average earnings
(if salary was less than two times the Social Security Wage Base)
or 30 percent (if salary was more than two times the Social
Security Wage Base) times the vesting percentage. Average
earnings are normally an employees average earnings for the
five highest consecutive full years of employment during the ten
full years of employment immediately preceding the year of
calculation. The annual PEP benefit is paid on a monthly basis
for 15 years to each participating employee and if deceased to
the employee's designated beneficiary or estate, commencing at
the earliest of death or when the employee is both retired and 62
years of age or more.
In the event that at the time of a Participant's
retirement from the Company the Participant's salary level
exceeds the qualified pension plan annual compensation limitation
of $150,000, then the Participant shall receive an additional
benefit which is measured by the difference between the monthly
benefit which would have been provided to the Participant under
the Company's defined benefit retirement plan as if there were no
annual compensation limitation and the monthly benefit to be
provided to the Participant under the Retirement Plan.
<PAGE>
Participants in the PEP are designated by the Board of
Directors upon recommendation of the Chief Executive Officer.
Selection is based on key employees as determined by management
and consideration of performance rather than salary based only.
The minimum salary component applied in the selection process is
the maximum annual Social Security taxable wage base which is
presently at $61,200.
Retirement Benefits
The following table illustrates estimated annual benefits
payable under the Retirement Plan and the PEP to employees who
retire at the normal retirement date.
Years of Service
Annual 15 20 25 30 35
Pay Years Years Years Years Years
$ 60,000 $ 27,941 $ 32,255 $ 36,569 $ 40,883 $ 45,196
75,000 35,291 40,805 46,319 51,833 57,346
90,000 42,641 49,355 56,069 62,783 69,496
110,000 52,441 60,755 69,069 77,383 85,696
125,000 66,041 75,555 85,069 94,583 104,096
150,000 79,541 91,055 102,569 114,083 125,596
175,000 93,041 106,555 120,069 133,583 147,096
200,000 106,541 122,055 137,569 153,083 168,596
225,000 120,041 137,555 155,069 172,583 190,096
Estimated annual benefits payable to officers named below
at age 65 from all sources are as follows: Daniel P. Landguth,
35 yrs. - $159,597; Dale E. Clement, 33 yrs. - $82,533<F1>;
Everett E. Hoyt, 31 yrs. - $78,156<F1>.
The benefits in the foregoing table were calculated as a
straight life annuity. Amounts shown are exclusive of Social
Security benefits and include benefits from both the Retirement
Plan and from the PEP assuming a 100 percent vested interest in
the PEP.
<F1> Such amounts are adjusted for benefits applicable to
service for prior employment.
<PAGE>
Employees' Stock Purchase Plan
Employees of the Company and its subsidiaries are eligible
to participate in the Employees' Stock Purchase Plan, as approved
by the shareholders at the 1987 Annual Meeting under which
offerings of the Company's Common Stock, at the discretion of the
Board, are made to employees at a price equal to 90 percent of
the closing sale price on the New York Stock Exchange on the date
of the offering. An offering was extended to employees in 1994
and officers subscribed to 2,200 shares at a price of $17.10 per
share. Shares are held in nominee name until subscriptions are
paid for in full.
Retirement Savings Plan
The Company has a Retirement Savings Plan under Section
401(k) of the Internal Revenue Code of 1954, as amended, which
permits employees of the Company and its subsidiaries, including
officers, to elect to invest up to 15 percent of their eligible
earnings on a pre-tax basis into an investment fund subject to
limitations imposed by the Internal Revenue Code. The Company
makes no contributions to the Plan.
Distribution from the fund will be made to employees at
termination of employment, retirement, death, or in case of
hardship. No amounts were paid or distributed pursuant to the
Retirement Savings Plan to the individuals named herein nor to
the officers as a group.
The Trustee for the Retirement Savings Plan (401(k) Plan)
has voting power with respect to shares held in the name of the
Trustee of the Plan.
Stock Performance Graph
The graph below compares the cumulative shareholder return
on the Company's Common Shares for the last five fiscal years
with the cumulative total return of the S&P 500 Index, the Edison
Electric Institute Electric Index, (EEI Electric Index) and the
Duff & Phelps Quality II Electrics Index over the same period
(assuming the investment of $100 on December 31, 1989, and the
reinvestment of all dividends). The Company has changed its
industry index from the Duff & Phelps Quality II Electrics to the
EEI Electric Index because the Securities and Exchange Commission
has approved the EEI Electric Index as a published index. The
Company believes the EEI Electric Index is more widely recognized
by investors. Both indexes have been shown for comparison
purposes.
<PAGE>
(INSERT CAMERA READY GRAPH)
1990 1991 1992 1993 1994
Black Hills Corporation $112 $161 $167 $146 $146
S&P 500 $ 97 $126 $136 $150 $152
EEI ELectric $101 $131 $141 $156 $138
Duff & Phelps Quality
II Electrics $104 $136 $143 $159 $142
<PAGE>
ITEM II
PROPOSAL TO AMEND THE 1987 EMPLOYEE STOCK
PURCHASE PLAN TO ALLOW THE ISSUANCE
OF AN ADDITIONAL 200,000 SHARES OF COMMON STOCK,
PAR VALUE $1.00,
PURSUANT TO THE PLAN
The 1987 Employee Stock Purchase Plan (the Plan), providing
for the sale of shares of the Company's Common Stock, Par Value
$1.00 (Shares) to employees, was adopted by the Board of
Directors on January 29, 1987, and approved by the shareholders
on May 20, 1987. The Board of Directors is of the opinion that
the Plan has proved to be of substantial value in stimulating the
efforts of employees and increasing their ownership in the
Company. The number of Shares remaining for issuance under the
Plan is insufficient to provide adequately for the future
participation by eligible employees who wish to purchase Shares.
Accordingly, on February 14, 1995, the Board of Directors
adopted an amendment to the Plan to increase the number of Shares
available for issuance under the Plan by an additional 200,000
Shares. The Plan is briefly described below.
Each full-time employee of the Company and its subsidiaries,
including officers, but excluding directors not otherwise
employed by the Company, is eligible to participate in the Plan.
A full-time employee is one who has been in the employ of the
Company or subsidiary for at least six months prior to the
Offering Date and who is in the active service of the Company or
subsidiary. Any employee whose customary employment is 20 hours
or less per week or whose customary employment is for not more
than five months per calendar year is not eligible to
participate. As of December 31, 1994 there were approximately
342 employees of the Company and 96 employees of the subsidiaries
who would have been eligible to participate in the Plan on that
date.
The Board of Directors of the Company determines the time
(Offering Date) at which Shares may be offered. The maximum
number of Shares which could originally be issued by the Company
under the Plan was 100,000 Shares subject to adjustment in the
event of stock dividends, stock splits or reverse stock splits.
This amount was increased to 137,459 Shares on March 2, 1992, to
reflect the adjustment for the three-for-two split. The amount
would be increased to 337,459 Shares if this proposal is
approved.
The Plan provides that an eligible employee may subscribe
for not less than 20 nor more than 400 Shares in connection with
each offering thereunder at a price equal to 90 percent of the
fair market value of such Shares on the date an offering is made
but not less than book value. The fair market value is deemed to
be the closing sale price of the Shares on the Offering Date as
<PAGE>
reported on the New York Stock Exchange - Composite Transactions.
A subscription, subject to cancellation by the employee,
must be completed through payroll deductions within 12 months
from the Subscription Date. All dividends declared and paid on
Shares subscribed for will be applied toward the purchase of
additional Shares through the Dividend Reinvestment and Stock
Purchase Plan at the Offering Price. The Company pays all
administrative costs of the Plan.
The Plan is administered by the Board of Directors which has
power and authority to promulgate such rules and regulations as
it deems appropriate therefor, to interpret its provisions and to
take all action in connection therewith as it deems necessary.
Other aspects of administration are handled by the Employees'
Stock Purchase Plan Committee, the membership of which will be
designated from time to time by the President of the Company. No
person is specifically compensated from assets of the Plan for
the performance of any such administrative duties.
The Board of Directors may amend, modify, suspend or
terminate the Plan at any time without notice, provided however,
that no such amendment, modification or termination shall
adversely affect any existing subscription or offering, and
provided further, that no such amendment shall increase the
number of shares authorized to be offered under the Plan, or
change the definition of eligible participants under the Plan.
Amounts received by the Company from the sale of the Shares
will be used for its general corporate purposes.
Since inception of the Plan through March 1, 1995, 80,528
Shares have been purchased, 24,233 Shares have been subscribed
to, and 32,698 Shares remain for future offerings.
It is the judgement of the Board of Directors that the Plan
promotes employee interest in the Company to the benefit of the
Company and its shareholders and the Amendment to the Plan should
be approved. Adoption of the following resolution is therefore
recommended:
RESOLVED, That the shareholders of the Company do
hereby approve the Amendment to the Employee Stock Purchase
Plan, as adopted by the Board of Directors at their meeting
held on February 14, 1995, increasing the number of shares
of the Company's authorized and unissued shares of Common
Stock, par value $1.00, to an additional 200,000 shares to
be available for issuance under the Plan.
<PAGE>
Vote Required
An affirmative vote of the holders of the majority of all
issued and outstanding shares of Common Stock is required to
adopt the foregoing resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ADOPTION OF THE RESOLUTION.
ITEM III
APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Arthur Andersen LLP, independent public
accountants, conducted the audit of the Company and its
subsidiaries for 1994. Representatives of Arthur Andersen LLP
will be present at the Annual Meeting and will have the
opportunity to make a statement, if they desire to do so, and to
respond to appropriate questions.
Audit services performed by Arthur Andersen LLP during 1994
included examinations of the financial statements of the Company
and its subsidiaries and limited reviews of interim financial
information.
The Board of Directors, on recommendation of the Audit
Committee and subject to ratification by shareholders, has
appointed Arthur Andersen LLP to perform an examination of the
consolidated financial statements of the Company and its
subsidiaries for the year 1995 and to render their opinion
thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP TO SERVE AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR 1995
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1996
Annual Meeting of Shareholders must be received by the Secretary
of the Company in writing at its home offices at 625 Ninth
Street, P.O. Box 1400, Rapid City, South Dakota 57709, prior to
November 25, 1995. Any proposal submitted must be in compliance
with Rule 14a-8 of Regulation 14A of the Securities and Exchange
Commission.
<PAGE>
ITEM V
TRANSACTION OF OTHER BUSINESS
The Board of Directors does not intend to present any
business for action by the shareholders at the meeting except the
matters referred to in this Proxy Statement. If any other
matters should be properly presented at the meeting, it is the
intention of the persons named in the accompanying form of proxy
to vote thereon in accordance with the recommendations of the
Board of Directors.
If a shareholder participates in the Company's Dividend
Reinvestment and Stock Purchase Plan, the proxy to vote shares of
record will serve as instructions to vote shares held in custody
for the shareholder. Accordingly, as Transfer Agent for shares
of the Company's Common Stock, Chemical Bank will cause shares
held in the name of its nominee for the account of a shareholder
participating in the Plan to be voted in the same way as that
shareholder votes shares registered in their name. If
shareholders do not vote the shares registered in their name,
shares held for their account in the Plan will not be voted.
Please complete and sign the accompanying form of proxy
whether or not you expect to be present at the meeting and
promptly return it in the enclosed postage paid envelope.
By Order of the Board of Directors
ROXANN R. BASHAM
Corporate Secretary
Dated: April 14, 1995
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The information required by Item 13, Financial and Other
Information, of Regulation 14-A is provided in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994,
which is incorporated by reference into this Proxy Statement.
The Company hereby undertakes to provide to each shareholder
whose proxy is solicited for the 1995 Annual Meeting, upon
written or oral request and without charge, a copy of the
Company's 1994 Annual Report on Form 10-K (without exhibits) to
the Securities and Exchange Commission. Requests should be
directed to Roxann R. Basham, Corporate Secretary and Treasurer,
Black Hills Corporation, P.O. Box 1400, Rapid City, SD 57709, or
telephone (605)-348-1700.
PLEASE COMPLETE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY SO THAT YOUR STOCK MAY
BE REPRESENTED AND VOTED AT THE ANNUAL MEETING.
<PAGE>
PROXY CARD
Front of Proxy Card
BLACK HILLS CORPORATION
625 NINTH STREET
RAPID CITY, SOUTH DAKOTA 57701
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS OF THE COMPANY
TO BE HELD MAY 23, 1995 AT 9:30 A.M.
The undersigned hereby appoints Daniel P. Landguth, Dale E. Clement,
and David E. Morrill, and any one or more of them, proxy attorneys, with full
substitution and revocation in each, for and on behalf of the undersigned,
and with all powers the undersigned would posess if personally present, to
vote at the above Annual Meeting and any adjournment thereof all shares of
Common Stock of Black Hills Corporation that the undersigned would be
entitled to vote at such meeting.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON
ANY ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATION, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
COMMENT/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued and to be signed on other side)
Back of Proxy Card X Please mark your votes this way
----------- ----------------------------
COMMON DIVIDEND REINVESTMENT SHARES
The Board of Directors recommends a vote FOR Items 1,2, and 3.
WITHHELD
FOR FOR ALL
Item 1-ELECTION OF CLASS III DIRECTORS
Nominees:
Kirk E. Dean
Michael B. Enzi
Everett E. Hoyt
WITHHELD FOR: (Write that nominee's name
in the space provided below).
(To cumulate votes so indicate)
Item 2-TO CONSIDER AND ACT UPON AN AMENDMENT
TO THE EMPLOYEE STOCK PURCHASE PLAN TO ALLOW
THE ISSUANCE OF AN ADDITIONAL 200,000 SHARES
PURSUANT TO THE PLAN.
Item 3-RATIFY THE APPOINTMENT OF ARTHUR
ANDERSEN LLP TO SERVE AS THE COMPANY'S
INDEPENDENT AUDITORS IN 1995.
Item 4-PROXY ATTORNEYS ARE AUTHORIZED AT
THEIR DISCRETION TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
I PLAN TO ATTEND MEETING
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change on
the reverse side
Black Hills Corporation, as Administrator under the Company's Dividend
Reinvestment and Stock Purchase Plan, is instructed to execute a proxy
with identical instructions, for any shares held for my benefit.
Signature(s) Date -----------------
Please mark, date and sign as your account name appears and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should indicate same when signing. If the signer is a corporation
or partnership, please sign the full corporate or partnership name by
authorized officer or person. If shares are held jointly, each stockholder
should sign.
