Exhibit 10.2
EMPLOYMENT AGREEMENT
Agreement made, effective as of December 20, 2002 by and between Black Hills
Corporation, a South Dakota corporation, with its principal office located at
625 Ninth Street, Rapid City, South Dakota, referred to in this agreement as
Employer, Black Hills or Company, and Xxxxxxx X. Xxxx, of Rapid City, South
Dakota, referred to in this agreement as Employee.
RECITALS
A. Employer is a public company engaged in the business of fuel production,
energy marketing, wholesale power generation, regulated electric utility,
and telecommunications.
B. Employee has been employed by the Company in various capacities since 1989,
and is currently employed as its President and Chief Operating Officer.
Employee has substantial experience in the above-designated business
activities and has provided valuable leadership for the Company. Employee
is eligible to retire from the Company at the present time, but could
continue his employment with the Company until mandatory retirement as an
officer of the Company, at age sixty-five (65), on August 8, 2004.
C. Employee is willing to continue his employment by Employer, and Employer is
willing to continue its employment of Employee, on the terms, covenants,
and conditions set forth in this Agreement.
In consideration of the matters described above, and of the mutual benefits and
obligations set forth in this agreement, the parties agree as follows:
SECTION ONE
EMPLOYMENT AND DUTIES
A. Employer employs, engages, and hires employee as an executive officer of
the Company to perform services in the management of business activities of
the Company, as assigned by the Chief Executive Officer. Employee accepts
and agrees to such hiring, engagement, and employment, subject to the
general supervision and pursuant to the orders, advice, and direction of
the Company, through its Board of Directors and Chief Executive Officer.
B. Employee shall perform such other duties as are customarily performed by
one holding such position in other, same, or similar businesses or
enterprises as that engaged in by Employer, and shall also render such
other and unrelated services and duties as may be assigned to him from time
to time by Employer.
SECTION TWO
BEST EFFORTS OF EMPLOYEE
Employee agrees that he will at all times faithfully, industriously, and to the
best of his ability, experience, and talents, perform all of the duties that may
be required of and from him pursuant to the express and implicit terms of this
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Agreement, to the reasonable satisfaction of Employer, in accordance with
policies of the Company, applicable law and regulations. Such duties shall be
rendered principally at 000 Xxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Dakota, and
intermittently at such other place or places as Employer shall in good faith
require or as the interest, needs, business, or opportunity of Employer shall
require.
SECTION THREE
TERM OF EMPLOYMENT
The term of this Agreement shall be the period commencing on the date of this
Agreement, and terminating August 8, 2004, ("Termination Date"), except as
provided in Section Eight of the Agreement with respect to termination for
cause.
SECTION FOUR
COMPENSATION OF EMPLOYEE
Employer shall pay Employee, and Employee shall accept from Employer, in full
payment for Employee's services under this Agreement, compensation at an annual
salary rate not less than $347,800.00, while this Agreement shall be in force.
Employer shall reimburse Employee for all necessary expenses incurred by
Employee while traveling pursuant to Employer's directions. Employee shall be
eligible to receive or participate in all other vacation and holiday pay,
benefit plans, perquisites, retirement, disability and deferred compensation
plans, health and life insurance, incentive and bonus payments, all as
customarily provided to executive officers of the Company, consistent with its
past practices and approved plans. From and after the Termination Date, Employee
shall be deemed to have retired from his employment with the Company for
purposes of determining his eligibility for benefits under Company benefit plans
relating to retirees.
SECTION FIVE
EXCLUSIVE EMPLOYMENT
Employee shall devote all of his time, attention, knowledge, and skills solely
to the business and interest of Employer, and Employer shall be entitled to all
of the benefits, profits, or other issues arising from or incident to all work,
services, and advice of Employee. Employee shall not, during the term of this
Agreement, be interested directly or indirectly, as partner, officer,
shareholder, advisor, employee, in any other business similar to Employer's
business or any allied trade; provided, however, that nothing contained in this
section shall be deemed to prevent or to limit the right of Employee to invest
any of his money in the capital stock or other securities of any corporation
whose stock or securities are publicly owned or are regularly traded on any
public exchange. Employee may accept appointment as a director of another public
or private company provided he complies with the Company's Governance
Guidelines, including Board approval of such appointments.
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SECTION SIX
RECOMMENDATIONS FOR IMPROVING OPERATIONS
Employee shall make available to Employer all information of which Employee
shall have any knowledge and shall make all suggestions and recommendations that
will be of mutual benefit to Employer and Employee.
SECTION SEVEN
CONFIDENTIALITY AND TRADE SECRETS
Except as required by law, Employee shall not at any time or in any manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation, or other entity in any manner whatsoever any information
concerning any matters affecting or relating to the business of Employer,
including but not limited to any of its customers, counter-party arrangements,
the prices it obtains or has obtained from the sale of, or at which it sells or
has sold, its products, or any other information concerning the business of
Employer, its manner of operation, its plans, processes, financial or business
strategy or other similar data. Employer and Employee specifically and expressly
stipulate that as between them, such matters are important, material, and
confidential and gravely affect the effective and successful conduct of the
business of Employer, and Employer's good will, and that any breach of the terms
of this section shall be a material breach of this Agreement.
SECTION EIGHT
TERMINATION
A. Termination without Cause. This agreement may be terminated by either
party, for any reason, without just cause, on thirty (30) days' written
notice to the other. If Employer shall so terminate this Agreement,
Employee shall be entitled to receive payment of compensation and benefits
as provided in this Agreement through and including the Termination Date.
If Employee shall so terminate this Agreement, Employee shall receive
compensation and benefits as provided in this Agreement through the
effective date of such termination of employment. In the event that
Employee's employment is terminated (actually or constructively) as a
result of a "Change of Control" , as defined in Company-approved Change of
Control Agreements, the parties agree that Employee shall be deemed to have
been terminated without cause for purposes of this Agreement.
B. Termination by Employer for Cause. In the event of any violation by
Employee of any of the terms of this Agreement, or for other just cause,
Employer may terminate this Agreement and Employee's employment upon thirty
(30) days' written notice and with compensation and benefits paid to
employee through the date of such termination. The written notice shall
state the grounds for termination. For purposes of this Agreement, "Cause"
or "Just Cause" means (i) an act or acts of dishonesty on Employee's part
which are intended to result in his substantial personal enrichment at the
expense of Black Hills; (ii) repeated violations by Employee of his
obligations under this Agreement which are demonstrably willful and
deliberate on his part and which result in material injury to Black Hills;
(iii) conduct of a criminal nature which has or which is more likely than
not to have a material adverse effect on Black Hills's reputation or
standing in the community or on its continuing relationships with its
customers or those who purchase or use its products; or (iv) fraudulent
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conduct in connection with the business or affairs of Black Hills,
regardless of whether said conduct is designed to defraud Black Hills or
others.
C. Termination by Employee for Good Reason. Employee may terminate his
employment at any time for Good Reason. For purposes of this Agreement,
"Good Reason" means the good faith determination by Employee that any one
or more of the following have occurred: (i) without the express written
consent of Employee, any change(s) in any of the duties, or
responsibilities of Employee which is (are) inconsistent in any substantial
respect with Employee's position, duties, or responsibilities as
contemplated by this Agreement; (ii) any failure by Black Hills to comply
with any of the provisions of this Agreement, other than an insubstantial
and inadvertent failure remedied by Black Hills promptly after receipt of
notice thereof given by Employee; (iii) without Employee's consent, any
requirement by Black Hills that Employee be based at any office or location
other than an office or location in Rapid City, South Dakota, except for
travel reasonably required in the performance of Employee's
responsibilities; (iv) any proposed termination by Black Hills of
Employee's employment otherwise than as permitted by this Agreement
D. It is further agreed that any breach or evasion of any of the terms of this
Agreement by either party will result in immediate and irreparable injury
to the other party and will authorize recourse to injunction and or
specific performance as well as to all other legal or equitable remedies to
which such injured party may be entitled under this Agreement.
E. In the event of termination by Employer without Cause, or by Employee for
Good Reason, Employee shall be entitled to receive compensation and
benefits as provided in this Agreement through and including the
Termination Date.
SECTION NINE
TERMINATION FOR DEATH OR DISABILITY
A. Notwithstanding anything in this Agreement to the contrary, Employer may
terminate this Agreement in the event that Employee shall, during the term
of this Agreement, die or become permanently disabled. Employer shall
provide written notice to Employee or his personal representative of its
election to terminate this Agreement for these reasons. On the giving of
such notice, this Agreement, and the employment of Employee, shall cease at
the end month in which the notice is delivered. In the event of termination
for reasons specified in this Section, Employee shall be given credit for
years of service through the Termination Date, for purposes of determining
his right to receive benefits under any retirement or pension plan of the
Company.
B. For the purposes of this Agreement, Employee shall be deemed to have become
permanently disabled according to the terms of Employer's Short Term and
Long Term Disability Plans currently in effect at the time of disability.
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SECTION TEN
CHOICE OF LAW AND VENUE
It is the intention of the parties that the terms of this Agreement and the
parties' performance under this Agreement, shall be construed in accordance with
and under and pursuant to the laws of the State of South Dakota. Any action,
special proceeding or other proceeding that may be brought arising out of, in
connection with, or by reason of this Agreement, shall be brought or filed in
the state or federal courts located in Xxxxxxxxxx County, South Dakota.
SECTION ELEVEN
MISCELLANEOUS PROVISIONS
A. Complete Agreement. Together with the terms of the Agreement for
Supplemental Pension Benefit dated January 20, 1992, as amended, this
Agreement contains the complete agreement concerning the employment
arrangement between the parties and shall. As of the effective date of this
Agreement, and except for the terms of the Agreement for Supplemental
Pension Benefit cited above, this Agreement shall supersede all other
agreements between the parties. The parties agree that the Change of
Control Agreement between them shall be cancelled upon the execution of
this Agreement. The parties stipulate that neither of them has made any
representation with respect to the subject matter of this Agreement or any
representations including the execution and delivery of this Agreement
except such representations as are specifically set forth in this
Agreement. Employee has relied on his own judgment in entering into this
Agreement. The parties further acknowledge that any payments or
representations that may have been made by either of them to the other
prior to the date of executing this Agreement are of no effect and that
neither of them has relied on such payments or representations in
connection with its dealings with the other.
B. Partial Invalidity. The invalidity of any portion of this Agreement will
not and shall not be deemed to affect the validity of any other provision.
In the event that any provision of this Agreement is held to be invalid,
the parties agree that the remaining provisions shall continue in full
force and effect as if they were executed by both parties subsequent to the
avoidance of the invalid provision.
C. Non-Waiver. The failure of either party to this Agreement to insist upon
the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this
Agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect
as if no such forebearance or waiver had occurred.
D. Modification and Assignment. Any modification of this agreement or
additional obligation assumed by either party in connection with this
Agreement shall be binding only if evidenced in writing signed by each
party or an authorized representative of each party. This Agreement may not
be assigned by either party without the written consent of the other.
E. Binding upon Successors. This Agreement shall be binding upon and inure to
the benefit of the parties, their heirs, personal representatives,
successors and assigns.
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F. Notices. All notices required under this Agreement shall be delivered as
follows: If to Employee: Xxxxxxx X. Xxxx 0000 Xxxxxxxx Xxxxx Xx. Xxxxx
Xxxx, XX 00000
If to Employer:
Black Hills Corporation
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, General Counsel
In witness of the above, each party to this Agreement has caused it to be
executed at Rapid City, South Dakota, on the date indicated below.
Black Hills Corporation
By: /s/ Xxxxxx X. Xxxxxxx
Its: General Counsel and Corporate Secretary
Date: December 20, 2002
Xxxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxx
Date: December 20, 2002
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