<SUBMISSION>
<ACCESSION-NUMBER>0001047469-08-004249
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20080520
<FILING-DATE>20080408
<DATE-OF-FILING-DATE-CHANGE>20080408
<EFFECTIVENESS-DATE>20080408
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BLACK HILLS CORP /SD/
<CIK>0001130464
<ASSIGNED-SIC>4911
<IRS-NUMBER>460458824
<STATE-OF-INCORPORATION>SD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-31303
<FILM-NUMBER>08744229
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>625 9TH STREET
<STREET2>PO BOX 1400
<CITY>RAPID CITY
<STATE>SD
<ZIP>57709
<PHONE>6057212343
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>625 9TH STREET
<STREET2>PO BOX 1400
<CITY>RAPID
<STATE>SD
<ZIP>57709
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>BLACK HILLS HOLDING CORP
<DATE-CHANGED>20001222
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>a2184298zdef14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0in 0in 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
Washington, D.C. 20549</font></b></p>

<p style="font-weight:bold;margin:0in 0in .0001pt;page-break-after:avoid;text-align:center;"><b><font size="4" face="Times New Roman" style="font-size:14.0pt;">SCHEDULE 14A</font></b></p>

<p align="center" style="margin:0in 0in 10.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Proxy Statement
Pursuant to Section&nbsp;14(a)&nbsp;of<br>
the Securities Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;&nbsp;)</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="672" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:503.7pt;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><!-- SET mrlNoTableShading -->Filed by the Registrant&nbsp;&nbsp;<font face="Wingdings">x</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="672" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:503.7pt;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Filed by a Party other than the
  Registrant&nbsp;&nbsp;</font><font face="Wingdings">o</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="672" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:503.7pt;">
  <p style="margin:4.0pt 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check the appropriate
  box:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25" valign="top" style="padding:0in .7pt 0in 0in;width:18.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="647" valign="top" style="padding:0in .7pt 0in 0in;width:485.1pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Preliminary Proxy Statement</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25" valign="top" style="padding:0in .7pt 0in 0in;width:18.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="647" valign="top" style="padding:0in .7pt 0in 0in;width:485.1pt;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Confidential, for Use of the Commission Only (as
  permitted by Rule&nbsp;14a-6(e)(2))</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25" valign="top" style="padding:0in .7pt 0in 0in;width:18.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">x</font></p>
  </td>
  <td width="647" valign="top" style="padding:0in .7pt 0in 0in;width:485.1pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Definitive Proxy Statement</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25" valign="top" style="padding:0in .7pt 0in 0in;width:18.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="647" valign="top" style="padding:0in .7pt 0in 0in;width:485.1pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Definitive Additional Materials</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="25" valign="top" style="padding:0in .7pt 0in 0in;width:18.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="647" valign="top" style="padding:0in .7pt 0in 0in;width:485.1pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Soliciting Material Pursuant to &#167;240.14a-12</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0in 0in 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:504.75pt;">
  <p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Black Hills
  Corporation</font><!-- SET mrlNoTableShading --></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:504.75pt;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Name of
  Registrant as Specified In Its Charter)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:504.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:504.75pt;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Name of
  Person(s)&nbsp;Filing Proxy Statement, if other than the Registrant)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="padding:0in .7pt 0in 0in;width:504.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="673" colspan="4" valign="top" style="padding:0in .7pt 0in 0in;width:504.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Payment of Filing Fee (Check the appropriate box):</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">x</font></p>
  </td>
  <td width="646" colspan="3" valign="top" style="padding:0in .7pt 0in 0in;width:484.35pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No fee required.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="646" colspan="3" valign="top" style="padding:0in .7pt 0in 0in;width:484.35pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fee computed on table below per Exchange Act
  Rules&nbsp;14a-6(i)(1)&nbsp;and&nbsp;0-11.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title of each class of securities to which
  transaction applies:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Aggregate number of securities to which transaction
  applies:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Per unit price or other underlying value of
  transaction computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the
  amount on which the filing fee is calculated and state how it was
  determined):</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Proposed maximum aggregate value of transaction:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5)</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total fee paid:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="23" valign="top" style="padding:0in .7pt 0in 0in;width:17.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="623" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:466.95pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="646" colspan="3" valign="top" style="padding:0in .7pt 0in 0in;width:484.35pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Fee paid previously with preliminary materials.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="646" colspan="3" valign="top" style="padding:0in .7pt 0in 0in;width:484.35pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check box if any part of the fee is offset as
  provided by Exchange Act Rule&nbsp;0-11(a)(2)&nbsp;and identify the filing
  for which the offsetting fee was paid previously. Identify the previous
  filing by registration statement number, or the Form&nbsp;or Schedule and the
  date of its filing.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font></p>
  </td>
  <td width="620" valign="top" style="padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amount Previously Paid:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="620" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font></p>
  </td>
  <td width="620" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form, Schedule or Registration Statement No.:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="620" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font></p>
  </td>
  <td width="620" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Filing Party:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="620" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font></p>
  </td>
  <td width="620" valign="top" style="border:none;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date Filed:</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="27" valign="top" style="padding:0in .7pt 0in 0in;width:20.4pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="26" colspan="2" valign="top" style="padding:0in .7pt 0in 0in;width:19.6pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="620" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in 0in;width:464.75pt;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="29" style="border:none;"></td>
  <td width="25" style="border:none;"></td>
  <td width="3" style="border:none;"></td>
  <td width="664" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0in 0in 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt 40.3pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Persons
who are to respond to the collection of information contained in this form are
not required to respond unless the form displays a currently valid OMB control
number.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<IMG SRC="g353410.jpg" ALT="LOGO" WIDTH="288" HEIGHT="142">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B><I>BLACK HILLS CORPORATION  </I></B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=4><B><I> <A NAME="bc17401_notice_of_2008_annual_meeting___not02434"> </A>
<A NAME="toc_bc17401_1"> </A>
<BR>    </I></B></FONT><FONT SIZE=3><B>Notice of 2008<BR>  Annual Meeting of Shareholders<BR>  and Proxy Statement  <BR>  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="be17401_black_hills_corporation"> </A>
<A NAME="toc_be17401_1"> </A>
<BR></FONT><FONT SIZE=4><B><I>BLACK HILLS CORPORATION  <BR>  </I></B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>625 Ninth Street<BR>
Rapid City, South Dakota 57701  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> <A NAME="be17401_notice_of_annual_meeti__be101749"> </A>
<A NAME="toc_be17401_2"> </A>
<BR>    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>  MAY 20, 2008    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>April&nbsp;8,
2008 </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>Dear
Shareholder: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are invited to attend the annual meeting of shareholders of Black Hills Corporation to be held on Tuesday, May&nbsp;20, 2008 at 9:30&nbsp;a.m., local time, at The Journey Museum,
222 New York Street, Rapid City, South Dakota. The purpose of our annual meeting is to consider and take action on the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Election
of four directors in Class&nbsp;II: David R. Emery, Kay S. Jorgensen, Warren L. Robinson and John B. Vering.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Ratification
of Deloitte&nbsp;&amp; Touche&nbsp;LLP to serve as our independent registered public accounting firm for the year 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>To
consider a shareholder proposal that may be presented at the meeting, which the Board of Directors and management oppose, to recommend the annual election of all directors instead
of electing directors for staggered three-year terms.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Any
other business that properly comes before the annual meeting. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
enclosed proxy statement discusses the important matters to be considered at this year's meeting. Our common shareholders of record as of April&nbsp;1, 2008 can vote at the annual
meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
vote is very important. You may vote your shares by telephone, by the Internet or by returning the enclosed proxy. If you own shares of common stock other than the shares shown on
the enclosed proxy, you will receive a proxy in a separate envelope for each such holding. Please vote each proxy received. To make sure that your vote is counted if voting by mail, you should allow
enough time for the postal service to deliver your proxy before the meeting. </FONT></P>

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<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Sincerely,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>
<IMG SRC="g219381.jpg" ALT="SIG" WIDTH="228" HEIGHT="42">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>ROXANN R. BASHAM<BR></FONT> <FONT SIZE=2><I>Vice President&#151;Governance and Corporate Secretary</I></FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=3,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=173411,FOLIO='blank',FILE='DISK123:[08ZAW1.08ZAW17401]BE17401A.;11',USER='DSCHWAR',CD='31-MAR-2008;16:12' -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="be17401_black_hills_corporation_1"> </A>
<A NAME="toc_be17401_3"> </A>
<BR></FONT><FONT SIZE=4><B><I>BLACK HILLS CORPORATION  <BR>  </I></B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>625 Ninth Street<BR>
Rapid City, South Dakota 57701  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B> <A NAME="be17401_proxy_statement"> </A>
<A NAME="toc_be17401_4"> </A>
<BR>    PROXY STATEMENT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A proxy in the accompanying form is solicited by the Board of Directors of Black Hills Corporation, a South Dakota corporation, to be voted at the annual meeting
of our shareholders to be held Tuesday, May&nbsp;20, 2008, and at any adjournment of the annual meeting. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 proxy in writing, addressed to our
secretary, or in person at the meeting at any time before the proxy is exercised. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will bear all costs of the solicitation. In addition to solicitation by mail, our officers and employees may solicit proxies by telephone, fax, or in person. We have retained
Georgeson&nbsp;Inc. to assist us in the solicitation of proxies at an anticipated cost of $7,000 plus out-of-pocket expenses. Also, we 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 materials to the beneficial owners of stock. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement and the accompanying form of proxy are to be first mailed on or about April&nbsp;8, 2008. Our 2007 annual report to shareholders is being mailed to shareholders
with this proxy statement. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="be17401_voting_rights_and_principal_holders"> </A>
<A NAME="toc_be17401_5"> </A>
<BR></FONT><FONT SIZE=2><B>VOTING RIGHTS AND PRINCIPAL HOLDERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only our shareholders of record at the close of business on April&nbsp;1, 2008, will be entitled to vote at the meeting. Our outstanding voting stock as of such
record date consisted of 38,397,919 shares of our common stock. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
outstanding share of our common stock is entitled to one vote. Cumulative voting is permitted in the election of our Board of Directors. Each share is entitled to four votes, one
each for the election of four directors, and the four votes may be cast for a single person or may be distributed among two, three or four persons. </FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="bg17401_table_of_contents"> </A>
<A NAME="toc_bg17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

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<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Commonly Asked Questions and Answers About the Annual Meeting Process</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Proposal 1&#151;Election of Directors</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Corporate Governance</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Meetings and Committees of the Board</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Executive Compensation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Compensation Discussion and Analysis</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Compensation Committee Report</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Summary Compensation Table</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Grants of Plan Based Awards in 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Outstanding Equity Awards at Fiscal Year-End 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Option Exercises and Stock Vested During 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Pension Benefits for 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Nonqualified Deferred Compensation for 2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Potential Payments Upon Termination or Change in Control</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="91%" style="font-family:times;"><FONT SIZE=2>Severance Agreement</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Director Compensation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Security Ownership of Management and Principal Shareholders</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Proposal 2&#151;Ratification of Appointment of Independent Registered Public Accounting Firm</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Fees Paid to the Independent Registered Public Accounting Firm</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Audit Committee Report</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Proposal 3&#151;Shareholder Proposal</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>42</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Transaction of Other Business</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Shareholder Proposals for 2009 Annual Meeting</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Shared Address Shareholders</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Annual Report on Form&nbsp;10-K</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Notice Regarding Availability of Proxy Materials</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>46</FONT></TD>
</TR>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ca17401_commonly_asked_questions_and_a__com02860"> </A>
<A NAME="toc_ca17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE<BR>  ANNUAL MEETING PROCESS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Who is soliciting my proxy?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The Board of Directors of Black Hills Corporation. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Where and when is the annual meeting?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>9:30&nbsp;a.m., local time, May&nbsp;20, 2008 at The Journey Museum, 222 New York Street, Rapid City, South Dakota. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;What am I voting on?  </B></FONT></P>

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<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2><B>A:</B></FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="93%" style="font-family:times;"><FONT SIZE=2>Election of four directors in Class&nbsp;II: David R. Emery, Kay S. Jorgensen, Warren L. Robinson and John B. Vering.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>
&#149;</FONT></TD>
<TD WIDTH="93%" style="font-family:times;"><FONT SIZE=2><BR>
Ratification of Deloitte&nbsp;&amp; Touche&nbsp;LLP as our independent registered public accounting firm for 2008.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>
&#149;</FONT></TD>
<TD WIDTH="93%" style="font-family:times;"><FONT SIZE=2><BR>
The consideration of a shareholder proposal that may be presented at the meeting, which the Board of Directors and management oppose, to recommend the annual election of all directors instead of electing directors for staggered three-year
terms.</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Who can vote?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Holders of our common stock as of the close of business on the record date, April&nbsp;1, 2008, can vote at our annual meeting. Each
share of our common stock gets one vote. Cumulative voting is permitted in the election of directors. Each share is entitled to four votes, one each for the election of four directors, and the four
votes may be cast for a single person or may be distributed among two, three or four persons. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;How do I vote?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>There are three ways to vote by proxy:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>by
calling the toll free telephone number on the enclosed proxy;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>by
using the Internet; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>by
returning the enclosed proxy in the envelope provided. </FONT></DD></DL>
</DD></DL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>You </FONT> <FONT SIZE=2><I>may</I></FONT><FONT SIZE=2> be able to vote by telephone or the Internet if your shares are held in the name of a bank or broker. If this is the case, you will need to
follow their instructions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>If
we receive your signed proxy before the annual meeting, we will vote your shares as you direct. You can specify on your proxy whether your shares should be voted for all, some or none of the
nominees for directors. You can also specify whether you approve, disapprove or abstain from the other two proposals. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>If
you do not mark any sections, your proxy card will be voted: </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in
favor of the election of the directors named in Item&nbsp;1;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>in
favor of Item&nbsp;2; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>against
Item&nbsp;3. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
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<UL>
<UL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
have the right to revoke your proxy any time before the meeting by: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>entering
a new vote by telephone or Internet;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>notifying
our secretary in writing;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>sending
a later dated proxy changing your vote; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>attending
the meeting in person and revoking your proxy at any time before the proxy is exercised. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Who will count the vote?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Representatives of Wells Fargo Bank, N.A. will count the votes and serve as judges of the election. </FONT></DD></DL>


<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;What constitutes a quorum?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>As of the record date, April&nbsp;1, 2008, 38,397,919 shares of our common stock were issued and outstanding. In order to conduct the
annual meeting, more than one-half of the outstanding shares must be present or be represented by proxy. This is referred to as a "quorum." If you submit a properly executed proxy card,
you will be considered as part of the quorum. Proxies marked as abstaining and broker non-votes on any proposal to be acted on by shareholders will be treated as present at the annual
meeting for purposes of determining a quorum. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;What vote is needed for these proposals to be adopted?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The affirmative vote of a plurality of the votes cast at the meeting is required for the election of directors. This means that the
nominees with the largest number of votes "for" will be elected as directors, up to the maximum number of directors to be chosen at the election. A properly executed proxy marked "Withhold authority"
with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a
quorum. </FONT></DD></DL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>The
appointment of Deloitte&nbsp;&amp; Touche&nbsp;LLP as our independent registered public accounting firm for the year 2008 will be ratified if a majority of the shares represented at the meeting
and entitled to vote on the item, vote in favor. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The
shareholder proposal to recommend the annual election of all directors requires the affirmative vote of the holders of a majority of the shares represented at the meeting and entitled to vote on
the item to approve the proposal. Shareholders should be aware that this shareholder proposal is simply a request that the Board take the action stated in the proposal. Approval of this proposal may
not result in the requested action being taken by the Board of Directors. Under South Dakota law, the Board of Directors must approve an amendment to its Articles of Incorporation and
Article&nbsp;VI of our Articles of Incorporation requires an affirmative vote of the holders of at least 80&nbsp;percent of the outstanding shares of our common stock to change the structure of
our Board of Directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>A
properly executed proxy marked "Abstain" with respect to the ratification of the appointment of Deloitte&nbsp;&amp; Touche as our independent registered public accounting firm and the shareholder
proposal to recommend the annual election of directors will have the effect of a negative, or "no" vote. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>If
you hold your shares in "street name" through a broker or nominee, your broker or nominee may not be permitted to exercise voting discretion with respect to some of the matters to be acted upon.
Thus, if you do not give your broker or nominee specific instructions, your shares may not be voted on those matters and will not be counted in determining the number of shares necessary </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>2</FONT></P>

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<UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>for
approval. Shares represented by such "broker non-votes" will, however, be counted in determining whether there is a quorum. </FONT></P>

</UL>


<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Is cumulative voting permitted for the election of directors?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>In the election of directors, you may elect to cumulate your vote. Cumulative voting will allow you to allocate among the director
nominees, as you see fit, the total number of votes equal to the number of director positions to be filled multiplied by the number of shares you hold. For example, if you own 100 shares of stock, and
there are four directors to be elected at the annual meeting, you could allocate 400 "For" votes (four times 100) among as few or as many of the four nominees to be voted on at the annual meeting as
you choose. </FONT></DD></DL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>If
you choose to cumulate your votes, you will need to submit a proxy card or a ballot and make an explicit statement of your intent to cumulate your votes, either by indicating in writing on the
proxy card or by indicating in writing on your ballot when voting at the annual meeting. If you hold shares beneficially in street name and wish to cumulate votes, you should contact your broker,
trustee or nominee. </FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;What should I do now?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>You should vote your shares by telephone, by the Internet or by returning your signed and dated proxy card in the enclosed envelope as
soon as possible so that your shares will be represented at the annual meeting. </FONT></DD></DL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Who conducts the proxy solicitation and how much will it cost?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>We are asking for your proxy for the annual meeting and will pay all the cost of asking for shareholder proxies. We have hired
Georgeson&nbsp;Inc. to help us send out the proxy materials and ask for proxies. Georgeson&nbsp;Inc.'s fee for these services is anticipated to be $7,000, plus
out-of-pocket expenses. We can ask for proxies through the mail or by telephone, fax, or in person. We can use our directors, officers and employees to ask for proxies. These
people do not receive additional compensation for these services. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding solicitation material to the beneficial owners of our common stock. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Can I revoke my proxy?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Yes. You can change your vote in one of four ways at any time before your proxy is used. First, you can enter a new vote by telephone or
Internet. Second, you can revoke your proxy by written notice. Third, you can send a later dated proxy changing your vote. Fourth, you can attend the meeting and vote in person. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;How will my shares be voted if they are held in a broker's name?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Your broker may vote shares nominally held in its name, or in what is commonly called "street name," under some circumstances, only if
you provide the broker with written instructions on how to vote. </FONT></DD></DL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;What happens if I do not give my broker instructions?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Absent your instructions, under some circumstances, these shares will not be voted. Therefore, we urge you to instruct your broker in
writing to vote shares held in street name. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;Who should I call with questions?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>If you have questions about the annual meeting, you should call Roxann R. Basham, Vice President&#151;Governance and Corporate
Secretary, at (605)&nbsp;721-1700. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Q:&nbsp;&nbsp;&nbsp;&nbsp;When are the shareholder proposals for the annual meeting held in 2009 due?  </B></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2><B>A:</B></FONT></DT><DD style="font-family:times;"><FONT SIZE=2>In order to be considered, you must submit proposals for next year's annual meeting in writing to our Corporate Secretary at our
executive offices at 625 Ninth Street, P.O.&nbsp;Box&nbsp;1400, Rapid City, South Dakota 57709, prior to December&nbsp;10, 2008. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc17401_proposal_1_election_of_directors"> </A>
<A NAME="toc_cc17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>Proposal 1    <BR>    <BR>    ELECTION OF DIRECTORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with our Bylaws and Article&nbsp;VI of our Articles of Incorporation, members of our Board of Directors are elected to three classes of staggered
terms consisting of three years each. At this annual meeting of our shareholders, four directors will be elected to Class&nbsp;II of the Board of Directors to hold office for a term of three years
until our annual meeting of shareholders in 2011, and until their respective successors shall be duly elected and qualified in accordance with the Company's Bylaws. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
four nominees for directors are presently members of our Board of Directors. Mr.&nbsp;Robinson was elected by the Board of Directors in April 2007 and is nominee for election for
the first time. Mr.&nbsp;Robinson was recommended for nomination by our Chief Executive Officer. The proxy attorneys will vote your stock for the election of the four nominees for directors, 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 such nominees as the Governance Committee may recommend and
the Board of Directors may propose to replace those who are unable to serve. The affirmative vote of a plurality of the votes cast at the meeting is required for the election of the nominees to the
Board of Directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;II Directors, each to serve for a term of three years to expire in 2011. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc17401_the_board_of_directors_recomme__the05373"> </A>
<A NAME="toc_cc17401_2"> </A>
<BR></FONT><FONT SIZE=2><B>The Board of Directors recommends a vote </B></FONT><FONT SIZE=2><B><I>FOR</I></B></FONT><FONT SIZE=2><B> the election of the following nominees:    <BR>    <BR>    Nominees for Election Until<BR>  2011 Annual
Meeting&#151;Class&nbsp;II    <BR>    </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="89%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name, Age, Principal Occupation for Last Five Years and Other Public Directorships<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Director<BR>
Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B>David R. Emery</B></FONT><FONT SIZE=2>, 45<BR>
Chairman, President and Chief Executive Officer of Black Hills Corporation, since 2005. Formerly held various positions with Black Hills Corporation, including President and Chief Executive Officer, President and Chief Operating Officer&#151;Retail
Business Segment and Vice President&#151;Fuel Resources. Mr.&nbsp;Emery has 18&nbsp;years of experience with Black Hills Corporation.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>2004</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Kay S. Jorgensen</B></FONT><FONT SIZE=2>, 57<BR>
Owner and Chief Executive Officer of KSJ Enterprises,&nbsp;LLC, providing marketing and development services since 2006. Former owner and Chief Executive Officer, Jorgensen-Thompson Creative Broadcast Services,&nbsp;Inc., a radio broadcast services
company, from 1997 to 2005. Previously served in the South Dakota State Legislature and on various state and local boards and commissions.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
1992</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Warren L. Robinson</B></FONT><FONT SIZE=2>, 57<BR>
Retired. Former Executive Vice President, Treasurer and Chief Financial Officer of MDU Resources Group,&nbsp;Inc., a diversified energy and resources company, from 1992 to January 2006.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>John B. Vering</B></FONT><FONT SIZE=2>, 58<BR>
Managing Director of Lone Mountain Investments,&nbsp;Inc., agricultural and oil and gas investments, since 2002. Co-founded PMT Energy,&nbsp;LLC, a natural gas and exploration company focused on the Appalachia Basin, in 2003. Previously held several
executive positions in the oil and gas industry.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
2005</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
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NAME="cc17401_directors_whose_terms_expire_a__dir02192"> </A>
<A NAME="toc_cc17401_3"> </A>
<BR></FONT><FONT SIZE=2><B>Directors Whose Terms Expire at<BR>  2009 Annual Meeting&#151;Class&nbsp;III    <BR>    </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="89%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name, Age, Principal Occupation for Last Five Years and Other Public Directorships<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Director<BR>
Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B>David C. Ebertz</B></FONT><FONT SIZE=2>, 62<BR>
President, Dave Ebertz Risk Management Consulting, a firm specializing in insurance and risk management services for schools and public entities, since 2000. Previous experience in the insurance industry.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>1998</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>John R. Howard</B></FONT><FONT SIZE=2>, 67<BR>
Retired. Former President, Industrial Products,&nbsp;Inc., an industrial parts distributor, providing equipment and supplies to the mining and manufacturing industries, from 1992 to 2003 and Special Projects Manager for Linweld,&nbsp;Inc. in Lincoln,
Nebraska.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
1977</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Stephen D. Newlin</B></FONT><FONT SIZE=2>, 55<BR>
Chairman, President and Chief Executive Officer of PolyOne Corporation, a global premier provider of specialized polymer materials, services and solutions, since 2006. Former President, Industrial Sector, Ecolab,&nbsp;Inc., a global leader of
services, specialty chemicals and equipment serving industrial and institutional clients, from 2003 to 2006. Private Investor and Business Advisor, 2001 to 2003. Currently Director of Valspar Corporation.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
2004</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc17401_directors_whose_terms_expire_a__dir02104"> </A>
<A NAME="toc_cc17401_4"> </A>
<BR></FONT><FONT SIZE=2><B>Directors Whose Terms Expire at<BR>  2010 Annual Meeting&#151;Class&nbsp;I    <BR>    </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="89%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name, Age, Principal Occupation for Last Five Years and Other Public Directorships<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Director Since</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><B>Jack W. Eugster</B></FONT><FONT SIZE=2>, 62<BR>
Retired. Former Non-Executive Chairman of Shopko Stores,&nbsp;Inc., a general merchandise discount store chain, from 2001 to 2005. Former Chairman, Chief Executive Officer and President of Musicland Stores,&nbsp;Inc., a retail music and home video
company, from 1980 until his retirement in 2001. Currently Director of Donaldson&nbsp;Co.,&nbsp;Inc. and Graco,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>2004</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Gary L. Pechota</B></FONT><FONT SIZE=2>, 58<BR>
President and Chief Executive Officer of DT-TRAK Consulting,&nbsp;Inc., a medical billing services company, since December 2007. Retired from 2005 to 2007. Former Chief of Staff of the National Indian Gaming Commission from 2003 to 2005. Private
investor and consultant from 2001 until August 2003. Previously held executive positions in the cement industry and positions in finance and accounting. Currently Director of Insteel Industries,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="89%" VALIGN="TOP" style="font-family:times;"><BR><FONT SIZE=2><B>Thomas J. Zeller</B></FONT><FONT SIZE=2>, 60<BR>
President, RESPEC, a technical consulting and services firm with expertise in engineering, information technologies and water and natural resources, since 1995.</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
1997</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cc17401_1_7"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc17401_corporate_governance"> </A>
<A NAME="toc_cc17401_5"> </A>
<BR></FONT><FONT SIZE=2><B>CORPORATE GOVERNANCE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Governance Guidelines.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors has adopted corporate governance guidelines titled "Corporate
Governance Guidelines of the Board of Directors" which set the tone for operation of our Board and assist the Board in fulfilling its obligations to shareholders and other constituencies. The
guidelines lay the foundation for the Board's responsibilities, operations, leadership, organization and committee matters. The Governance Committee reviews the guidelines annually, and the guidelines
may be amended at any time, upon recommendation by the Governance Committee and approval of the Board. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board Independence.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In accordance with New York Stock Exchange rules, the Board of Directors through its Governance Committee
affirmatively determines the independence of each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence set forth in the New York Stock
Exchange listing standards. These guidelines are contained in our Policy for Director Independence, which can be found in the "Governance" section of our website
(</FONT><FONT SIZE=2><I>www.blackhillscorp.com/corpgov.htm</I></FONT><FONT SIZE=2>). Based on these standards, the Governance Committee determined that each of the following nonemployee directors is
independent and has no relationship with the Company, except as a director and shareholder of the Company: </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>David C. Ebertz</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Jack W. Eugster</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>John R. Howard</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Kay S. Jorgensen</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Stephen D. Newlin</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Gary L. Pechota</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Warren L. Robinson</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>John B. Vering</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Thomas J. Zeller</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, based on such standards, the Governance Committee determined that Mr.&nbsp;Emery is not independent because he is our Chairman, President and Chief Executive Officer (the
"CEO"). </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presiding Director and Executive Sessions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Board has a Presiding Director position that is named annually. Kay S.
Jorgensen has been serving as our Presiding Director since May 2006. The responsibilities of Presiding Director, as provided in the Board's Governance Guidelines, are to chair executive sessions of
the non-management directors and communicate the Board's annual evaluation of the CEO. The Presiding Director, together with the non-management directors, establishes the
agenda for executive sessions, which are held at the end of each regular Board meeting. The Presiding Director serves as a liaison between the non-management members of the Board and the
CEO, and discusses, to the extent appropriate, matters discussed by the non-management directors in executive session. The Presiding Director also presides over regular meetings of the
Board in the absence of the Chairman. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consideration of Director Nominees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Governance Committee utilizes a variety of methods for identifying and evaluating
nominees for director. The Committee regularly assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. In the event vacancies
are anticipated, or otherwise arise, the Committee considers various potential candidates for director. Board candidates are considered based upon various criteria, including diverse business,
administrative and professional skills or experiences; an understanding of relevant industries, technologies and markets; financial literacy; independence status; the ability and willingness to
contribute time and special competence to Board activities; personal integrity and independent judgment; and a commitment to enhancing shareholder value. The Committee considers these and other
factors as it deems appropriate, given the current needs of the Board and the Company. The Committee considers candidates for Board membership suggested by a variety of sources, including current or
past Board members, members of management and shareholders. There are no differences in the manner by which the Committee evaluates director candidates recommended by shareholders from those
recommended by other sources. The Committee has also retained a third-party executive search firm at times to identify candidates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cc17401_1_8"> </A>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nominations
from our shareholders for membership on the Board of Directors will be considered by the Governance Committee. A shareholder who wishes to submit names for future
consideration for Board membership should do so in writing, with whatever supporting material the shareholder considers appropriate, addressed to Governance Committee, c/o Corporate Secretary, Black
Hills Corporation, P.O.&nbsp;Box&nbsp;1400, Rapid City, South Dakota 57709. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Communications with the Board.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Shareholders and others interested in communicating directly with the Presiding Director, with
the non-management directors as a group, or the Board of Directors may do so in writing to the Presiding Director, Black Hills Corporation, P.O.&nbsp;Box&nbsp;1400, 625 Ninth Street,
Rapid City, South Dakota, 57709. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Policy on Related Party Transactions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We recognize related party transactions can present potential or actual conflicts of
interest and create the appearance that decisions are based on considerations other than the best interests of the Company and our shareholders. Accordingly, as a general matter, it is our preference
to avoid related party transactions. Nevertheless, we recognize that there are situations where related party transactions may be in, or may not be inconsistent with, the best interests of the Company
and our shareholders, including but not limited to situations where we may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from
alternative sources or when we provide products or services to related parties on an arm's length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those
provided to employees generally. Therefore, our Board of Directors has adopted a policy for the review of related party transactions. This policy requires directors and officers to promptly report to
our Vice President&#151;Governance all proposed or existing transactions in which the Company and they, or persons related to them, are parties or participants. Our Vice
President&#151;Governance presents to our Governance Committee those transactions that may require disclosure pursuant to Item&nbsp;404 of Regulation&nbsp;S-K (typically, those
transactions that exceed $120,000). Our Governance Committee reviews the material facts presented and either approves or disapproves entry into the transaction. In reviewing the transaction, the
Governance Committee considers the following factors, among other factors it deems appropriate: (i)&nbsp;whether the transaction is on terms no less favorable than terms generally available to an
unaffiliated third-party under the same or similar circumstances; (ii)&nbsp;the extent of the related party's interest in the transaction; and (iii)&nbsp;the impact on a director's independence in
the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Governance Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The charters of the Audit, Compensation, Executive and Governance committees, as well as the
Board's Corporate Governance Guidelines, Policy for Director Independence, Code of Business Conduct and the Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer,
Corporate Controller, and certain other persons performing similar functions can be found in the "Governance" section of our website
(</FONT><FONT SIZE=2><I>www.blackhillscorp.com/corpgov.htm</I></FONT><FONT SIZE=2>). Copies may also be obtained upon request from our Corporate Secretary. Please note that none of the information
contained on our website is incorporated by reference in this proxy statement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) Beneficial Ownership Reporting Compliance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Based solely upon a review of our records and copies of
reports on Form&nbsp;3, 4 and 5 furnished to us, we believe that during and with respect to 2007, all persons subject to the reporting requirements of Section&nbsp;16(a) of the Securities Exchange
Act of 1934, as amended, filed the required reports on a timely basis, except for one Form&nbsp;4 for Mr.&nbsp;Eugster that was filed one day late relating to the acquisition of phantom stock
under the Outside Directors Stock Based Compensation Plan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cc17401_1_9"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cc17401_meetings_and_committees_of_the_board"> </A>
<A NAME="toc_cc17401_6"> </A>
<BR></FONT><FONT SIZE=2><B>MEETINGS AND COMMITTEES OF THE BOARD    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>The Board of Directors  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our directors review and approve our strategic plan and oversee management of the Company. Our Board of Directors held 16 meetings during 2007. Directors'
attendance at all Board and Committee meetings averaged 99&nbsp;percent. During 2007, every director attended at least 75&nbsp;percent of the combined total of Board meetings and Committee
meetings on which the director served. Each regularly scheduled meeting of the Board includes an executive session of only non-management directors. We encourage our directors to attend
the annual shareholders' meeting. All 10 directors were in attendance at the 2007 annual meeting of shareholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Committees of the Board  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board has four standing committees to facilitate and assist the Board in the execution of its responsibilities. The committees are currently the Audit
Committee, the Compensation Committee, the Governance Committee and the Executive Committee. In accordance with the New York Stock Exchange listing standards and our Corporate Governance Guidelines,
the Audit, Compensation and Governance Committees are comprised solely of non-employee, independent directors. Each committee operates under a charter which is available on our website at </FONT> <FONT
SIZE=2><I>www.blackhillscorp.com/corpgov.htm</I></FONT><FONT SIZE=2> and is also available in print to any shareholder who requests it. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Members
of the Committees are designated by our directors upon recommendation of the Governance Committee. The table below shows current membership for each of the Board committees. </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="23%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Audit Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Compensation Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="25%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Governance Committee</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="23%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Executive Committee</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>John R. Howard</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>David C. Ebertz</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>David C. Ebertz</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>David C. Ebertz</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>Warren L. Robinson</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Jack W. Eugster*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>Jack W. Eugster</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>David R. Emery*</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>John B. Vering</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Kay S. Jorgensen</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>John R. Howard*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>John R. Howard</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>Thomas J. Zeller*</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Stephen D. Newlin</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>Stephen D. Newlin</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>Kay S. Jorgensen</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Gary L. Pechota</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" style="font-family:times;"><FONT SIZE=2>John B. Vering</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>Thomas J. Zeller</FONT></TD>
</TR>
</TABLE></DIV>
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<UL>
<UL>
<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Committee
Chairperson </FONT></DD></DL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee held eight meetings in 2007. The Audit Committee's responsibilities, discussed in detail
in its charter include, among other duties, the responsibility to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assist
the Board in fulfilling its responsibility for oversight of the quality and integrity of our accounting, auditing and financial reporting practices;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>monitor
the integrity of our financial reporting process, systems of internal controls and disclosure controls regarding finance, accounting and legal compliance;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
areas of potential significant financial risk to the Company;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
consolidated financial statements and disclosures;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>appoint
an independent registered public accounting firm for ratification by our shareholders;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>monitor
the independence and performance of our independent registered public accountants and internal auditing department;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>pre-approve
all audit and non-audit services provided by our independent registered public accountants;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
the scope and results of the annual audit including reports and recommendations of our independent registered public accountants; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
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<UL>
<UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
the internal audit plan, results of internal audit work and monitor compliance with our Code of Conduct; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>periodically
meet with our internal audit group, management, and independent registered public accounting firm. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with the rules of the NYSE, all of the members of the Audit Committee are financially literate. The Board determined that Messrs.&nbsp;Howard, Robinson, Vering and Zeller
each have the requisite attributes of an "audit committee financial expert" as provided in regulations promulgated by the Securities and Exchange Commission, and that such attributes were acquired
through relevant education and/or experience. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee held five meetings in 2007. The Compensation Committee's responsibilities,
discussed in detail in its charter include, among other duties, the responsibility to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>approve
and oversee the implementation of the executive and director compensation philosophy, policies and programs;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>perform
functions required by the Board of Directors in the administration of all federal and state statutes relating to employment and compensation;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>consider
and recommend for approval by the Board all executive compensation programs including benefits, stock option plans and stock ownership plans; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>promote
an executive compensation program that supports the overall objective of enhancing shareholder value. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee has authority under its charter to retain and terminate compensation consultants, outside counsel and other advisors as the Committee may deem appropriate in
its sole discretion. The Committee has sole authority to approve related fees and retention terms. The Committee may delegate any of its responsibilities to subcommittees as the Committee may deem
appropriate in its sole discretion. The Committee engaged Hewitt Associates, an independent consulting firm, to conduct an annual review of its 2007 total compensation program for executive officers
and non-employee directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee annually evaluates the CEO's performance in light of established goals and objectives, with input from the other independent directors. Based upon the Committee's
evaluation and
recommendation, the independent directors of the Board set the CEO's annual compensation, including salary, bonus, incentive and equity compensation and perquisites. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CEO annually reviews the performance of each of our senior officers. He presents a summary of his evaluations of the Chief Operating Officer&#151;Utilities (the
"COO-Utilities,") the Chief Operating Officer&#151;Non-regulated Energy Group (the "COO-Non-regulated Energy") and the Executive Vice President
and Chief Financial Officer (the "CFO") to the Compensation Committee. Based upon the Committee's review and recommendation, the Board of Directors sets the annual compensation of the
COO-Utilities, COO-Non-regulated Energy and CFO, including salary, bonus, incentive and equity compensation and perquisites. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
CEO also annually reviews the performance of our other senior officers and provides oversight of management's evaluations of our other officers. Senior officers assess performance of
all officers reporting to them. Based upon these performance reviews, market analysis conducted by the compensation consultant and discussions with the human resources department, the CEO recommends
the compensation of this group of officers to the Committee. The Committee may exercise its discretion in modifying any of the recommended compensation and award levels in its review and approval
process. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>10</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;More
information describing the Compensation Committee's processes and procedures for considering and determining executive compensation, including the role of our CEO and consultants in
determining or recommending the amount or form of executive compensation, is included in the Compensation Discussion and Analysis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
setting non-employee director compensation, the Compensation Committee recommends the form and amount of compensation to the Board of Directors and the Board of Directors
makes the final determination. In considering and recommending the compensation of non-employee directors, the Compensation Committee considers such factors as it deems appropriate,
including historical compensation information, level of compensation necessary to attract and retain non-employee directors meeting our desired qualifications and market data. In the
review of director compensation for 2007, the Compensation Committee retained Hewitt Associates to provide market information on non-employee director compensation, including annual board
and committee retainers, board and committee meeting fees, committee chairperson fees, number of Board meetings and stock based compensation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Committee Interlocks and Insider Participation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee is comprised entirely of independent
directors. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governance Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Governance Committee held three meetings in 2007. The Governance Committee's responsibilities,
discussed in detail in its charter include, among other duties, the responsibility to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>assess
the size of the Board and membership needs and qualifications for Board membership;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>recruit
and recommend prospective directors to the Board to fill vacancies;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>consider
and recommend existing Board members to be renominated at our annual meeting of shareholders;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>establish
and review guidelines for corporate governance;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>recommend
to the Board committee membership and the chairpersons of the committees;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>nominate
an independent director to serve as a Presiding Director;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
the independence of each director and director nominee;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>administer
an annual evaluation of the performance of the Board and facilitate an annual assessment of each committee; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
with the CEO the succession plan for corporate officers. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Committee.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Executive Committee acts upon specific authorization by the Board of Directors in the interval
between Board meetings. The Executive Committee held one meeting in 2007. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>11</FONT></P>

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<A NAME="toc_ce17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>EXECUTIVE COMPENSATION    <BR>    <BR>    COMPENSATION DISCUSSION AND ANALYSIS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Introduction  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Compensation Discussion and Analysis is designed to provide shareholders with a better understanding of our compensation philosophy, core principles and
decision-making process. It explains the compensation-related actions taken with respect to 2007 compensation for our executive officers included in the Summary Compensation Table (our "Named
Executive Officers"). Our Named Executive Officers, based on 2007 positions and compensation levels, are: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>David
R. Emery, our CEO;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mark
T. Thies, our CFO in 2007 and 2006 (Mr.&nbsp;Thies resigned on January&nbsp;18, 2008);
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Thomas
M. Ohlmacher, our COO-Non-regulated Energy;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Linden
R. Evans, our COO-Utilities; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Steven
J. Helmers, our Senior Vice President and General Counsel. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee of the Board of Directors (the "Committee," for purposes of this Compensation Discussion and Analysis) is composed entirely of independent directors and is
responsible for approving and overseeing the implementation of our executive compensation philosophy, policies and programs. The Committee has a written executive compensation philosophy which details
the objectives of our executive compensation program. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation Philosophy.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our long-term success depends on our ability to operate effectively and efficiently,
offering reliable service to our customers and investing wisely for present and future success. To achieve these goals, we must attract, motivate, and retain highly talented individuals. For these
reasons, the Committee seeks to promote an executive compensation program that supports the overall objective of enhancing shareholder value and is based on principles designed to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>attract,
retain and encourage the development of highly qualified and motivated executives;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide
compensation that is competitive;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>promote
the relationship between pay and performance;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>promote
overall corporate performance that is linked to the interests of our shareholders; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>recognize
and reward outstanding performance. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
market for our senior executive talent is national in scope and is not focused on any one geographic location, area or region of the country. As such, our executive compensation
should be competitive with the national market place for senior executives. Beginning in 2008, the Committee has changed the market for our corporate executives from the general and diversified energy
industry to
the utility and energy industry, recognizing the significant role our regulated utility operations will have in the future with the proposed acquisition of Aquila's electric utility in Colorado and
its gas utilities in Colorado, Kansas, Nebraska and Iowa. The executive compensation should also reflect the executive's responsibilities and duties and be aligned with the pay of executives at
companies or business units of comparable size and complexity. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overall,
our goal is to provide total direct compensation (the sum of base salary, annual bonus and long-term incentives) at the median of the appropriate market when our
operating results approximate average performance in relation to our peers. Individual executive's compensation may vary from the median based on such factors as individual skills, experience,
contribution and performance, historic compensation, internal equity, retention concerns and other factors relevant to the individual executive. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>12</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>Our
executives' actual direct compensation should vary significantly based on how actual performance varies from average or target results. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
executive compensation is designed to maintain an appropriate and competitive balance between fixed and variable pay elements, short- and long-term compensation, and cash
as well as stock-based compensation. We believe that the performance basis for determining compensation should differ by each reward element&#151;base salary, annual bonus and
long-term incentive compensation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incentive
measures (short- and long-term) should emphasize objective, quantitative operating measures. The Committee retains the right to positively or negatively adjust
incentive payments based on their subjective evaluation of performance, including the materiality of certain extraordinary events. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have a policy that if an accounting restatement occurs after incentive payments have been made, due to the results of misconduct associated with financial reporting, the Committee
will seek repayment of the incentive compensation from our CEO and CFO and has the discretion to request repayment of incentive compensation from our other officers, taking into consideration the
individual roles and responsibilities prompting the restatement. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe it is important for our officers to hold Company stock to further link performance to the interests of our shareholders. Consequently, we have stock ownership guidelines in
place for all officers with minimum stock ownership levels that are based upon their level of responsibility. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is our philosophy to qualify, to the extent reasonably practicable, our executive officers' compensation for deductibility under applicable tax law. We reserve the flexibility
necessary to provide
total cash compensation in line with competitive practice, our compensation philosophy, and the Company's best interests, and may from time to time pay compensation to our executive officers that may
not be deductible for tax purposes. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Setting Executive Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon this compensation philosophy, the Committee structures our executive compensation to motivate our officers to achieve specified business goals and to
reward them for achieving such goals. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee selects and retains the services of an independent consulting firm to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide
information regarding practices and trends in compensation programs;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
and evaluate our compensation program as compared to compensation practices of other companies with similar characteristics, including size and type of business;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>review
and assist with the establishment of a peer group of companies; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide
a compensation analysis of the executive positions. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2007, the Company operated in a diverse collection of businesses; therefore, our comparator group was comprised of both utility and general industry companies. The Committee used the
services of Hewitt Associates for evaluating 2007 compensation issues. Hewitt gathered data from its database, as well as from public and private surveys covering the utility and general industries. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
salary surveys used by Hewitt Associates were: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Hewitt
Associates: Total Compensation Measurement Database&#151;Utility and General Industry;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Hewitt
Associates: Power Industry Compensation Survey;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Hewitt
Associates: Energy Marketing&nbsp;&amp; Trading Survey;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Towers
Perrin: Energy Services Industry, Executive Compensation Database; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>13</FONT></P>

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<UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>ECS/Watson
Wyatt: Top Management Report; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>ECI:
Oil and Gas Industry Compensation Survey. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
salary surveys are one of several inputs into the Committee's decisions regarding appropriate compensation levels. Other factors include company performance, individual performance,
the level and nature of responsibilities, and discussions with the CEO and human resources department. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
important component of the total compensation is derived from incentive compensation as discussed in our compensation philosophy above. The Committee reviews information provided by
the compensation consultant to determine the appropriate level and mix of incentive compensation. Actual income in the form of incentive compensation is realized by the executive as a result of
achieving Company goals and overall stock performance. The Committee believes that a significant portion of total target compensation should be comprised of incentive compensation. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee annually reviews tally sheets on all components of each executive officer's compensation, including salary, bonus, equity and other long-term incentive
compensation values granted, the actual value realized from stock option exercises and restricted stock and restricted stock units vested, the value of all perquisites and other personal benefits, and
the projected annual benefit under our Pension and Pension Equalization Plans. The Committee uses the tally sheets as a resource that concisely summarizes all elements of actual and potential future
compensation of our officers facilitating the Committee's analysis of both the individual elements of compensation as well as the total aggregate amount of actual and projected compensation and
internal pay relationships between the officer positions. In the review of tally sheets, the Committee concluded that both the annual compensation and the compensation mix were consistent with the
Committee's expectations. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Role of the Committee and Board in Setting Executive Compensation.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each year the Committee evaluates the CEO's performance in
light of established goals and objectives, with input from the other independent directors. Based upon the Committee's evaluation and recommendation, the independent directors of the Board set the
CEO's annual compensation, including salary, bonus, incentive and equity compensation and perquisites. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee reviews the CEO's evaluation of the performance of the COO-Utilities, COO-Non-regulated Energy and the CFO in light of established goals
and objectives. Based upon the Committee's review and recommendation, the Board of Directors sets the annual compensation of the COO-Utilities, COO-Non-regulated
Energy and CFO, including salary, bonus, incentive and equity compensation and perquisites. The Committee also reviews and approves the CEO's recommendations for compensation of our other senior
officers. The Committee is required to approve all decisions regarding equity awards to our officers. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Role of Executive Officers in Compensation Decisions.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The CEO annually reviews the performance of each of our senior
officers. He presents a summary of his evaluation of all of our senior officers to the Committee and thoroughly reviews the COO-Utilities, COO-Non-regulated Energy
and CFO evaluations with the Committee. Based upon these performance reviews, market analysis conducted by compensation consultants and discussions with our human resources department, the CEO
recommends the compensation of this group of officers to the Committee. The Committee may exercise its discretion in modifying any of the recommended compensation and award levels in its review and
approval process. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Components of Executive Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The components of our executive compensation program consist of a base salary, an annual incentive plan, and a long-term incentive award program. In
addition, we provide income for our officers' retirement and other benefits. In order to reward long-term growth as well as short-term results, the Committee establishes
incentive targets that emphasize long-term compensation at a higher </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>14</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>level
than short-term compensation. The components of total target compensation in 2007 were as follows: </FONT></P>

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<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Base&nbsp;Salary</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Annual&nbsp;Incentive</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Long-Term&nbsp;Incentive</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>47</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>34</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>51</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>31</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base Salary.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Base salaries for all officers are reviewed annually. The base salary component is targeted at the median of the
market data provided by the compensation consultant. The actual base salary of each officer is determined by the executive's performance, the experience level of the officer, the executive's current
position in a market-based salary range, and internal pay relationships. Evaluation and approval of base salary adjustments normally occurs in December, with the adjustments effective in January of
the following year. We also adjust the base salary of our executives at the time of a promotion or change in job responsibility, as appropriate. The Committee approved base salary increases for the
Named Executive Officers ranging from 3.0% to 5.0% for 2007. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annual Incentive.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our Short-Term Annual Incentive Compensation Program is designed to recognize and reward the
contributions of individual executives as well as the contributions that group performance makes to overall corporate success. The program's goal for our corporate officers is based on earnings per
share targets in order to closely align interests with shareholders and to foster teamwork and cooperation within the officer team. The annual incentive, after applicable tax withholding, is
distributed to the officer in the form of 50&nbsp;percent stock and 50&nbsp;percent cash, unless the officer has met his or her stock ownership guideline whereby he or she has the option to
receive the total award in cash, after applicable tax withholding. Target award levels are established as a percentage of each participant's base salary considering the appropriate compensation survey
data. A target award is comparable to the average annual incentive payout award of the comparator group at the 50<SUP>th</SUP>&nbsp;percentile level. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee approves the target level for each officer in December, which is applicable to performance in the following plan year. Target levels are derived in part from competitive
data provided by the compensation consultant and in part by the Committee's judgment on internal equity of the positions and their value to the Company. The target levels for the positions held by our
Named Executive Officers are shown below. The actual amount awarded to corporate officers ranges from zero to two times the target percentage depending on the performance level. </FONT></P>

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<TD WIDTH="90%" style="font-family:times;"><FONT SIZE=2>CEO</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>70</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="90%" style="font-family:times;"><FONT SIZE=2>COO-Non-regulated Energy</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="90%" style="font-family:times;"><FONT SIZE=2>COO-Utilities</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="90%" style="font-family:times;"><FONT SIZE=2>CFO</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="90%" style="font-family:times;"><FONT SIZE=2>Sr. Vice President and General Counsel</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
threshold, target and maximum payout levels for our Named Executive Officers under the 2007 Short-Term Annual Incentive Plan are shown in the Grants of Plan Based Awards
in 2007 table under the heading "Estimated Possible Payouts Under Non-Equity Incentive Plan Awards." </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
February, the Committee meets to establish the goals for the current plan year, to evaluate actual performance in relation to the prior year's targets and to approve the actual
payment of awards related to the prior plan year. The Committee reserves the discretion to adjust any award, and will review and take into account individual performance, level of contribution and the
accomplishment of </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<BR>

<P style="font-family:times;"><FONT SIZE=2>specific
project goals that were initiated throughout the plan year. In February 2007, the Committee approved the goals for the 2007 plan year for the corporate officers as follows: </FONT></P>

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<TH WIDTH="51%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Threshold<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Earnings&nbsp;Per&nbsp;Share Goal</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Payout&nbsp;%&nbsp;of&nbsp;Target</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="51%" style="font-family:times;"><FONT SIZE=2>Minimum</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>30</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="51%" style="font-family:times;"><FONT SIZE=2>Target</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.24</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="51%" style="font-family:times;"><FONT SIZE=2>Maximum</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2.50</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
target earnings per share goal for 2007 equaled 2007 budgeted earnings per share. In February 2008, the Committee approved a payout of 200&nbsp;percent of target under the 2007
Short-Term Annual Incentive Plan as a result of our 2007 earnings per share of $2.64 exceeding the maximum earnings per share goal under the 2007 plan. The 2007 award, after applicable tax
withholding, was distributed in the form of 50&nbsp;percent stock and 50&nbsp;percent cash for Mr.&nbsp;Emery and Mr.&nbsp;Evans. Mr.&nbsp;Thies, Mr.&nbsp;Ohlmacher and Mr.&nbsp;Helmers
had met their stock ownership guidelines and
elected to receive their 2007 award in the form of 100&nbsp;percent cash. Awards for corporate officers under the Short-Term Annual Incentive Plan have varied significantly over the last
five years as shown below. </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="77%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Plan Year<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Payout&nbsp;%&nbsp;of&nbsp;Target</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>200</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>150</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=2>2005</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=2>2004</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="77%" style="font-family:times;"><FONT SIZE=2>2003</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>37.5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual
awards made to each of our Named Executive Officers under the Short-Term Annual Incentive Plans for 2007 are included in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
2008, the Committee reviewed the design of the Short-Term Annual Incentive Plan, addressing the volatility of our energy marketing segment's earnings and the potential
that these earnings may disproportionately influence bonus outcomes for participants in the Short-Term Annual Incentive Plan. The Committee selected a modified earnings per share goal for
the 2008 corporate goal that is weighted 80&nbsp;percent on non-energy marketing earnings per share and 20&nbsp;percent on energy marketing earnings per share. The Committee chose this
weighted methodology because it aligns the plan more clearly with the ability of the majority of the employees to directly impact the results and it prevents the variability of earnings from our
energy marketing segment from disproportionately influencing payouts of the plan, both positively and negatively. It also continues to meet the objectives of the plan including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>aligning
the interests of the plan participants and the shareholders with a corporate-wide component;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>motivating
employees and supporting the corporate compensation philosophy;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>being
easily understood and easily communicated to ensure "buy-in" from the participants; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>by
meeting the performance objectives of the plan, an average payout of target can be attained over time. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term Incentive.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Long-term incentive compensation is comprised of grants made by the Committee
under our 2005 Omnibus Incentive Plan ("Omnibus Incentive Plan") which was previously approved by our shareholders. Long-term incentive compensation is intended to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>promote
corporate goals by linking the personal interests of participants to those of our shareholders; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<UL>
<UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide
participants with an incentive for excellence in individual performance;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>promote
teamwork among participants; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>provide
flexibility in our effort to motivate, retain, and attract the services of participants who make significant contributions to our success by allowing participants to
share in such success. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee oversees the administration of the Omnibus Incentive Plan with full power and authority to determine when and to whom awards will be granted, along with the type, amount
and other terms and conditions of each award. The long-term incentive compensation component is currently composed of restricted stock (or restricted stock units) and performance shares.
The Committee chose these components because they believe that executive compensation tied to stock price appreciation and total shareholder return is an effective way to align the interests of
management with those of our shareholders. The Committee selected total shareholder return as the performance goal for the performance shares because it believes executive pay under a
long-term, capital accumulation program such as this should mirror our performance in shareholder return as compared to our peer group of companies. None of our Named Executive Officers
have received stock option grants since 2003. When stock options have been granted, they were granted with an exercise price equal to the fair market value of the common stock on the date of grant. No
stock option back-dating occurred. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
value of long-term incentives awarded is based primarily on competitive market-based data presented by the compensation consultant to the Committee, the impact each
position has on our shareholder return and internal pay relationships. The Committee approves the target long-term incentive compensation level for each officer in December, which is
awarded in January of the following year. Long-term incentive compensation approved for the 2007 plan year for our Named Executive Officers is shown in the table below. </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="57%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Long-Term<BR>
Incentive&nbsp;Value</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Percentage&nbsp;of<BR>
Base&nbsp;Salary</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>600,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>110</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>210,300</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>73</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>380,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>111</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>239,000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>94</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>160,900</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>62</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
variance in percentage of base salary for the long-term incentive value reflects our philosophy that the CEO and COOs should have more of their total compensation at risk
because they are in positions that have a more direct impact on our long-term results. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted
stock (or restricted stock units) are targeted to deliver 50&nbsp;percent of the long-term incentive opportunity, with the remaining 50&nbsp;percent delivered
in the form of performance shares. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted Stock and Restricted Stock Units.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock and restricted stock units vest one-third each year
over a three-year period, and automatically vest in their entirety upon death, disability or a change in control. Dividends are paid on the restricted shares and dividend equivalents
accrue on restricted stock units. Unvested restricted stock or units are forfeited if an officer's employment is terminated for any reason other than death, disability or in the event of a change in
control. Restricted stock and restricted stock units granted prior to December&nbsp;10, 2007 also automatically vest in their entirety upon retirement. Corporate officers may elect to receive the
award in the form of restricted stock, or to defer the payment under the Nonqualified Deferred Compensation Plan, in the form of restricted stock units. Restricted stock award values are normally
approved in December with a grant date effective in the first week in January of the following year. The number of shares awarded in 2007 for each of our Named Executive Officers are shown below and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>17</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=22,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=457119,FOLIO='17',FILE='DISK123:[08ZAW1.08ZAW17401]CE17401A.;12',USER='VSTEFAN',CD=';1-APR-2008;22:03' -->
<A NAME="page_ce17401_1_18"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>are
included in the Grants of Plan Based Awards in 2007 table under the heading "All Other Stock Awards: Number of Shares of Stock or Units" and "Grant Date Fair Value of Stock Awards." </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="66%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="83%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007<BR>
Restricted<BR>
Shares<BR>
Granted</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="83%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,224</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="83%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,973</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="83%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,120</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="83%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,220</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="83%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,308</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Shares.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Participants are awarded a target number of performance shares based upon the value of the individual
performance share component approved by the Committee, divided by the Beginning Stock Price. The Beginning Stock Price, as defined under the Performance Plan, is the average of the closing price of
our common stock for the 20 trading days immediately preceding the beginning of the plan period. Entitlement to performance shares is based on our total shareholder return over designated performance
periods, as measured against our peer group. In addition, in order for any performance shares to be awarded, our stock price must also increase during the performance period from the Beginning Stock
Price. The final value of the performance shares is based upon the number of shares of common stock that are ultimately granted, based upon our performance in relation to the performance criteria. At
the end of each respective performance period, actual awards may range from 0&nbsp;percent to 175&nbsp;percent of the target share amounts plus accrued dividends. A 100&nbsp;percent payout of
the target shares occurs if our total shareholder return exceeds the 50<SUP>th</SUP>&nbsp;percentile of the peer group. For the performance period that ended in 2007 and the performance period
that ends in 2008, a zero percent payout occurs if we are below the 30<SUP>th</SUP>&nbsp;percentile. For the performance periods that end in 2009 and 2010, the minimum threshold for a payout was
raised from the 30<SUP>th</SUP>&nbsp;percentile to the 40<SUP>th</SUP>&nbsp;percentile. For all the performance periods outstanding, the maximum payout of 175&nbsp;percent occurs if we
perform at the 80<SUP>th</SUP>&nbsp;percentile or above. The performance awards and dividend equivalents, if earned, are paid in 50&nbsp;percent cash and 50&nbsp;percent common stock. All
payroll deductions and applicable tax withholding related to the award are withheld from the cash portion. Performance share target grant values are normally approved in December for a
three-year performance period beginning January&nbsp;1 of the following year. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
peer group is comprised of the following companies for the performance periods that end in 2007, 2008 and 2009: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Alliant Energy Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>NStar</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>DPL&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>OGE&nbsp;Energy&nbsp;Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Great&nbsp;Plains&nbsp;Energy&nbsp;Incorporated</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Pepco Holdings&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Hawaiian Electrics Inds.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>PNM Resources&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>IDACORP,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Puget Energy&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Integrys Energy Group,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Wisconsin Energy Corp.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Northeast Utilities</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
peer group was originally identified as the companies in the S&amp;P MidCap Electric Utilities Index; however because of re-categorizing of companies in the index by S&amp;P
from time to time, the companies in the peer group must be tracked individually. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee changed our peer group for the January&nbsp;1, 2008 to December&nbsp;31, 2010 Performance Period, recognizing a peer group that is more reflective of Black Hills
Corporation upon </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=23,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=414509,FOLIO='18',FILE='DISK123:[08ZAW1.08ZAW17401]CE17401A.;12',USER='VSTEFAN',CD=';1-APR-2008;22:03' -->
<A NAME="page_ce17401_1_19"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>the
closing of the proposed acquisition of Aquila's electric utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska and Iowa. The new peer group is comprised of the following
companies: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>AGL Resources&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Otter Tail Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>ALLETE&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>PNM Resources,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Avista Corp</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Portland&nbsp;General&nbsp;Electric&nbsp;Company</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>CH Energy Group&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Puget Energy,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Cleco Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Sierra Pacific Resources</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>DPL&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>UIL Holdings Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Great&nbsp;Plains&nbsp;Energy&nbsp;Incorporated</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>UniSource Energy Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>IDACORP,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Vectren Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>MDU Resources Group,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>Westar Energy,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>NorthWestern Corporation</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%" style="font-family:times;"><FONT SIZE=2>WGL Holdings,&nbsp;Inc.</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
performance share period is for three-years. For the recently completed performance period, January&nbsp;1, 2005 to December&nbsp;31, 2007, our total shareholder return was
58&nbsp;percent, which ranked at the 87<SUP>th</SUP>&nbsp;percentile of our peer group, resulting in a payout of 175&nbsp;percent of target levels. The awards were paid in the form of
50&nbsp;percent cash and 50&nbsp;percent common stock. The actual shares, cash and total payout value awarded to our Named Executive Officers for the performance period were as follows: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Janaury 1, 2005 to December&nbsp;31, 2007 Performance Period  </I></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="41%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Equivalent<BR>
Shares&nbsp;Earned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>50%&nbsp;Awarded<BR>
in&nbsp;Shares</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>50%&nbsp;Awarded<BR>
in&nbsp;Cash</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
Payout&nbsp;Value</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="41%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,339</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,169</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>311,737</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>623,446</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="41%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,701</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,351</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>145,677</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>291,379</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="41%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,108</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,054</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>263,230</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>526,457</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="41%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,643</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,821</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>166,179</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>332,316</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="41%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,088</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,544</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>110,599</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>221,212</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Target
shares for each of our Named Executive Officers for the outstanding performance periods are as follows: </FONT></P>

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<TABLE WIDTH="93%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="38%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,&nbsp;2006<BR>
to<BR>
December&nbsp;31,&nbsp;2008<BR>
Performance&nbsp;Period</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,&nbsp;2007<BR>
to<BR>
December&nbsp;31,&nbsp;2009<BR>
Performance&nbsp;Period</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>January&nbsp;1,&nbsp;2008<BR>
to<BR>
December&nbsp;31,&nbsp;2010<BR>
Performance&nbsp;Period</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="38%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,326</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,163</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,900</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="38%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>NA</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>NA</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>NA</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="38%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,303</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,170</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,370</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="38%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,348</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,252</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,748</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="38%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,245</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,189</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,850</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual
payouts, if any, will be determined based upon the total shareholder return for the plan period in comparison to the peer group. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Ownership Guidelines.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee has implemented stock ownership guidelines that apply to all officers. We believe
it is important for our officers to hold a significant amount of our common stock to further align their performance with the interest of our shareholders. A "retention ratio" approach to stock
ownership is incorporated into the guidelines. This approach requires officers to retain 100&nbsp;percent of all shares owned, including shares awarded through our incentive plans (net of share
withholding for taxes and in the case of cashless stock option exercises net of the exercise price and withholding for taxes) until specific ownership goals are achieved. Ownership guidelines are
denominated in share amounts which approximate a multiple of base pay. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ownership guidelines and current stock ownership of our Named Executive Officers are shown below. </FONT></P>

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<TABLE WIDTH="87%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="57%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Officer Level<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Ownership<BR>
Guideline<BR>
(#&nbsp;of&nbsp;Shares)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Actual<BR>
Ownership<BR>
(#&nbsp;of&nbsp;Shares)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Years<BR>
in<BR>
Position</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>David R. Emery, CEO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>90,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71,116</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies, former CFO</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,834</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>NA</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher, COO-Non-regulated Energy</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,544</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans, COO-Utilities</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,671</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="57%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers, Senior Vice President&nbsp;&amp; General Counsel</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,002</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perquisites and Other Personal Benefits.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We provide a limited number of market-based perquisites to our executive officers
which include financial planning services and personal use of a Company vehicle. The total value of these perquisites in 2007 for our Named Executive Officers ranged from $1,767 to $7,600. The
perquisites' value was reported as taxable income to the officers and the officers were required to pay the applicable taxes. The Committee periodically reviews the perquisites and other personal
benefits provided to our executive officers and believes the current perquisites are reasonable and consistent with our overall compensation program. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retirement and Other Benefits.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We currently maintain a variety of employee benefit plans and programs in which our executive
officers may participate, including a 401(k) Retirement Savings Plan, the Pension Plan, the Pension Equalization Plan, 2007 Pension Equalization Plan and the Nonqualified
Deferred Compensation Plan. We believe it is important to provide post-employment benefits to our executive officers and the benefits we provide approximate retirement benefits paid by
other employers to its executives in similar executive positions. The Committee periodically reviews the benefits provided with assistance from its compensation consultant to maintain a market-based
benefits package. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Black Hills Corporation 401(k) Retirement Savings Plan is offered to all eligible employees of the Company and its subsidiaries except for Cheyenne Light, Fuel and Power which has
its own 401(k) Plan. All of our Named Executive Officers are participants in the Black Hills Corporation 401(k) Retirement Savings Plan. Participants may elect to invest up to 20&nbsp;percent of
their eligible compensation on a pre-tax basis up to maximum amounts established by the Internal Revenue Service. The Black Hills Corporation 401(k) Plan provides a matching contribution
of 100&nbsp;percent of the employee's annual tax-deferred contribution up to a maximum of 3&nbsp;percent of eligible compensation. Matching contributions vest at 20&nbsp;percent per
year and are fully vested when the participant has five years of service with the Company. Each of our Named Executive Officers received the maximum annual contribution of $6,750 in 2007. The matching
contribution is included as "All Other Compensation" in the Summary Compensation Table. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Black Hills Corporation Pension Plan covers the employees of Black Hills Corporation and a number of its subsidiary companies. The plan is a qualified defined benefit pension plan
that provides benefits at retirement based on length of employment service and certain average compensation levels during the highest five consecutive years of the last ten years of service. Our
employees do not contribute to the plan. Each of our Named Executive Officers are participants in the plan and none of our Named Executive Officers have been granted additional years of credited
service. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
defined benefit pension plan is limited by the Internal Revenue Code in the amount of annual payments received under the plan ($180,000 in 2007) and in the amount of compensation
that can be taken into account in determining contributions and benefits ($225,000 in 2007). Because of these limitations we also have the Pension Equalization Plan and the 2007 Pension Equalization
Plan. The level of retirement benefits provided by the Pension Plan, Pension Equalization Plan, 2007 Pension Equalization Plan and the Pension Restoration Benefit for each of our Named Executive
Officers is </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<BR>

<P style="font-family:times;"><FONT SIZE=2>reflected
in the Pension Benefits for 2007 table and explained in more detail in the accompanying narrative. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Pension Equalization Plan is a nonqualified supplemental retirement plan with a pension restoration benefit designed to provide the higher paid executive employee a retirement
benefit which, when added to social security benefits and the pension to be received under the defined benefit pension plan, approximate retirement benefits paid by other employers to its employees in
similar executive positions. The Board of Directors designates the participants in the Pension Equalization Plan. Each of our Named Executive Officers except Mr.&nbsp;Evans is a participant in the
Pension Equalization Plan. The Pension Equalization Plan has been frozen to new participants since 2002. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Several
of our current corporate officers became officers after the Pension Equalization Plan was frozen to new participants. During 2006 and early 2007, the Committee, in consultation
with Mercer Human Resource Consulting, an independent consultant engaged by the Committee, thoroughly reviewed the need to offer some form of supplemental retirement plan to officers. The Committee
concluded that a supplemental retirement plan was needed for corporate officers who were not participants in the existing frozen Pension Equalization Plan in order to provide a benefits package
consistent with market practices. In 2007, the Committee recommended and the Board of Directors approved the 2007 Pension Equalization Plan. The Board of Directors designated four corporate officers,
including Mr.&nbsp;Evans, who were not participants in the existing Pension Equalization Plan as participants in the 2007 Pension Equalization Plan with years of credited service equal to the number
of years they served as a corporate officer. Mr.&nbsp;Evans received two years of credited service. The main differences between the original Pension Equalization Plan and the 2007 Pension
Equalization Plan are as follows: </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>Annual Benefit Amount  </I></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="4%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="44%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Original&nbsp;Pension&nbsp;Equalization&nbsp;Plan<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="44%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>2007&nbsp;Pension&nbsp;Equalization&nbsp;Plan<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="4%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>25% of average earnings, if salary was less than two times the social security wage base, or 30%, if salary was more than two times the social security wage base, multiplied by the vesting percentage</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>2% of average earnings times the participant's years of service as an officer (up&nbsp;to a maximum of 15&nbsp;years) times the applicable vesting percentage</FONT></TD>
<TD WIDTH="4%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2><I>Vesting Schedule  </I></FONT></P>

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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Original Pension Equalization Plan</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007 Pension Equalization Plan</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="33%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Years of Plan Participation<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Vesting<BR>
%</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="42%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Age at Termination of Employment or Discontinuance of Participation<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Vesting<BR>
%</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>Less than 3&nbsp;years</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>Age 65 or over</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>3&nbsp;years but less than 4</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>Age&nbsp;55&nbsp;with&nbsp;over&nbsp;10&nbsp;years&nbsp;of&nbsp;vesting&nbsp;service</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>4&nbsp;years but less than 5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>35</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>Age 55 with less than 10&nbsp;years of service</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>5&nbsp;years but less than 6</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>Under age 55</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>6&nbsp;years but less than 7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>65</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>7&nbsp;years but less than 8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>80</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%" style="font-family:times;"><FONT SIZE=2>8 or more years</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="BOTTOM" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nonqualified Deferred Compensation Plan allows our corporate officers to elect to defer up to 50&nbsp;percent of their base salary and up to 100&nbsp;percent of their
Short-Term Annual Incentive Plan award, including Company stock, and elect to defer restricted stock grants in the form of restricted stock units. We make no contributions to the plan.
None of our Named Executive Officers are currently contributing to the Nonqualified Deferred Compensation Plan. The deferred balance in the plan for each of our Named Executive Officers is shown in
the Nonqualified Deferred Compensation for 2007 table. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>21</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Named Executive Officers may also receive severance benefits in the event of a change in control. Change in control agreements are common among our peer group and the Committee and
our Board of Directors believe providing these agreements to our corporate officers protect our shareholder interests in the event of a change in control by helping assure management focus and
continuity. Our change in control agreements have termination dates and our Board of Directors conduct a thorough review of the change in control agreements before renewing them. There are currently
10 change in control agreements in place with a term ending June&nbsp;1, 2008. In general, our change in control agreements provide a severance payment of up to 2.99 times average compensation for
our CEO and up to two times average compensation for our other corporate officers. The change in control agreement for our CEO contains a "modified trigger," providing benefits in association with a
change in control upon: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(i)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>termination
of employment other than by death, disability or by the Company for cause,
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(ii)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
termination by the CEO for good reason, or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(iii)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
termination by the CEO for any reason during a 30-day window period immediately following the first anniversary of a change in control. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
change in control agreements for our other corporate officers contain a "double trigger," providing benefits in association with a change in control only upon: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(i)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>termination
of employment other than by death, disability or by the Company for cause, or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(ii)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
termination by the employee for good reason. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
the Potential Payments Upon Termination or Change in Control table and the accompanying narrative for more information regarding our change in control agreements and estimated
payments associated with a change in control. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deductibility of Executive Compensation.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;162(m) of the U.S. Internal Revenue Code of 1986, as amended, limits
the tax deductibility by a corporation of compensation in excess of $1&nbsp;million paid to its CEO and any of its four most highly compensated executive officers. Compensation which qualifies as
"performance-based" is excluded from the $1&nbsp;million limit, if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance
goals under a plan approved by the corporation's shareholders. As a result, the Compensation Committee has designed a large share of our incentive compensation for the Named Executive Officers to
qualify for the exemption of "performance-based" compensation from the deductibility limit. However, the Compensation Committee does have the discretion to design and use compensation elements that
may not be deductible under Section&nbsp;162(m) if it determines those elements are in our best interests. We believe the compensation paid to our Named Executive Officers in 2007 is fully
deductible. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cg17401_compensation_committee_report"> </A>
<A NAME="toc_cg17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>COMPENSATION COMMITTEE REPORT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item&nbsp;402(b) of Regulation&nbsp;S-K
with management and, based on such review and discussions, the Compensation Committee recommended to the Company's Board of Directors that the Compensation Discussion and Analysis be included in this
Proxy Statement. </FONT></P>

<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>THE
COMPENSATION COMMITTEE </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>Jack
W. Eugster, Chairperson<BR>
David C. Ebertz<BR>
Kay S. Jorgensen<BR>
Stephen D. Newlin<BR>
Gary L. Pechota </FONT></P>

</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>22</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
<UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cg17401_summary_compensation_table"> </A>
<A NAME="toc_cg17401_2"> </A>
<BR></FONT><FONT SIZE=2><B>SUMMARY COMPENSATION TABLE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the total compensation paid or earned by each of our Named Executive Officers for the fiscal years ended December&nbsp;31, 2007
and December&nbsp;31, 2006. We have no employment agreements with our Named Executive Officers. Amounts listed under the heading "Non-Equity Incentive Plan Compensation" represent
amounts earned under the Short-Term Annual Incentive Plan for 2007 and 2006, respectively. The Compensation Committee approved the payout of the 2007 awards at its February&nbsp;1, 2008,
meeting and the awards were paid on February&nbsp;26, 2008. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on the fair value of equity awards granted to our Named Executive Officers in 2007 and the base salary of our Named Executive Officers, base salary accounted for 36&nbsp;percent
to 51&nbsp;percent of total compensation, short-term annual incentive accounted for 18&nbsp;percent to 25&nbsp;percent of total compensation and long-term incentive
accounted for 31&nbsp;percent to 43&nbsp;percent of total compensation. Because the table below reflects the value of certain equity awards based on the Statement of Financial Accounting Standards
123(R), "Share-Based Payment," ("FAS&nbsp;123(R)") value rather than the fair value, these percentages cannot be derived using the amounts reflected in the table below. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=27 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="16%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name and<BR>
Principal Position</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="4%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Salary</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Bonus(1)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock Awards(2)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards(3)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Non-Equity Incentive Plan Compensation(4)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Change in Pension Value and Non-qualified Deferred Compensation Earnings(5)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other Compensation(6)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=27 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>David R. Emery<BR>
Chairman, President and Chief Executive Officer</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>544,231<BR>
524,039</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>921,030<BR>
327,766</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
14,551</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>763,000<BR>
551,250</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>312,524<BR>
249,828</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,583<BR>
40,276</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,577,368<BR>
1,707,710</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=27 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies<BR>
Executive Vice President and Chief Financial Officer(7)</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>288,377<BR>
279,885</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>390,408<BR>
153,680</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
14,239</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>230,960<BR>
168,180</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,058<BR>
55,459</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,776<BR>
31,969</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>948,579<BR>
703,412</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=27 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher<BR>
President and Chief Operating Officer&#151;Non-regulated Energy</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>340,600<BR>
340,219</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
32,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>766,103<BR>
405,299</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
34,085</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>340,600<BR>
255,450</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,645<BR>
223,970</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26,103<BR>
35,574</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,487,051<BR>
1,326,597</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=27 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans<BR>
President and Chief Operating Officer&#151;Utilities</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>253,035<BR>
240,712</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>432,649<BR>
151,114</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
12,748</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>253,500<BR>
181,050</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>53,952<BR>
10,802</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20,166<BR>
20,088</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,013,302<BR>
616,514</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=27 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers<BR>
Senior Vice President and General Counsel</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>259,408<BR>
251,819</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>296,868<BR>
115,168</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
9,612</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>181,790<BR>
132,353</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>54,414<BR>
109,035</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,231<BR>
17,322</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>807,711<BR>
635,309</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=27 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Ohlmacher's
2006 bonus reflects a $32,000 relocation bonus to compensate for additional state income taxes.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Stock
Awards represent the annual compensation expense related to restricted stock, restricted stock units and performance shares that have been granted as a component of
Long-Term Incentive Compensation. The amount reported is the amount recognized for financial statement reporting purposes computed in accordance with FAS&nbsp;123(R), and therefore
includes amounts for awards granted in prior years. Assumptions used in the calculation of these amounts are included in Note&nbsp;9 of the Notes to the Consolidated Financial Statements in our
Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2007. <BR></FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=28,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=311461,FOLIO='23',FILE='DISK123:[08ZAW1.08ZAW17401]CG17401A.;12',USER='VSTEFAN',CD=';1-APR-2008;21:49' -->
<A NAME="page_cg17401_1_24"> </A>
<UL>

<P style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Ohlmacher
turned age 55 in September 2006 which made him eligible for early retirement. Because our restricted stock and restricted stock units granted prior to December&nbsp;10, 2007
fully vest at retirement, the fair value of $190,000 associated with Mr.&nbsp;Ohlmacher's awards granted in each of 2007 and 2006 was all recognized in the year of grant in accordance with
FAS&nbsp;123(R), rather than expensing the award over the normal three year vesting period. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Option
Awards represent the annual compensation expense related to stock options that have been granted as a component of Long-Term Incentive Compensation in prior years.
The amount reported is the amount recognized for financial statement reporting purposes computed in accordance with FAS&nbsp;123(R), and therefore includes amounts for awards granted in prior years.
Assumptions used in the calculation of these amounts are included in Note&nbsp;9 of the Notes to the Consolidated Financial Statements in our Annual Report on Form&nbsp;10-K for the
year ended December&nbsp;31, 2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Non-Equity
Incentive Plan Compensation represents amounts earned under the Short-Term Annual Incentive Plan.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Change
in Pension Value and Nonqualified Deferred Compensation Earnings represents the increase in actuarial value of the Defined Benefit Pension Plan, Pension Restoration Benefit
("PRB"), Pension Equalization Plan ("PEP"), and 2007 Pension Equalization Plan ("2007 PEP") for the respective year. No Named Executive Officer received preferential or above-market earnings on
nonqualified deferred compensation. The value attributed from each plan to each Named Executive Officer is shown in the table below. Mr.&nbsp;Evans was not a participant in the PRB or PEP in 2007
and 2006. Mr.&nbsp;Evans is the only Named Executive Officer participating in the 2007 PEP. </FONT></DD></DL>
<BR>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="92%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="27%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Defined<BR>
Benefit Plan</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Pension<BR>
Restoration Benefit</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>PEP and<BR>
2007 PEP</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total Change in<BR>
Pension Value</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,366<BR>
13,444</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>159,889<BR>
116,786</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>146,269<BR>
119,598</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>312,524<BR>
249,828</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,897<BR>
11,200</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,195<BR>
16,192</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,966<BR>
28,067</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,058<BR>
55,459</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,675<BR>
49,308</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(18,858<BR>
109,399</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)<BR></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>(4,172<BR>
65,263</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>)<BR></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,645<BR>
223,970</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,958<BR>
10,802</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,994<BR>
&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>53,952<BR>
10,802</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007<BR>
2006</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,460<BR>
20,172</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>13,020<BR>
16,389</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,934<BR>
72,474</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>54,414<BR>
109,035</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>All
Other Compensation includes amounts allocated under the 401(k) match, dividends received on restricted stock and unvested restricted stock units and perquisites. Perquisites
provided to our Named Executive Officers include personal use of a Company vehicle and financial planning services for 2007 and 2006 and club dues in 2006 only. </FONT></DD></DL>
<BR>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="35%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Year</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>401(k)<BR>
Match</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Dividends on<BR>
Restricted<BR>
Stock/Units</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
Perquisites</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total Other<BR>
Compensation</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=15 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22,233</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,600</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,583</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,774</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,252</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,776</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,525</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,828</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>26,103</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,409</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20,166</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,714</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,767</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,231</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=15 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Thies
resigned from the Company on January&nbsp;18, 2008. Mr.&nbsp;Thies's severance agreement is disclosed under the caption "Severance Agreement." </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=29,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=210533,FOLIO='24',FILE='DISK123:[08ZAW1.08ZAW17401]CG17401A.;12',USER='VSTEFAN',CD=';1-APR-2008;21:49' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_ci17401_1_25"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ci17401_grants_of_plan_based_awards_in_2007(1)"> </A>
<A NAME="toc_ci17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>GRANTS OF PLAN BASED AWARDS IN 2007(1)    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=25 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=4 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="7%" ROWSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>All Other<BR>
Stock<BR>
Awards:<BR>
Number of<BR>
Shares of<BR>
Stock or<BR>
Units(4)<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Estimated Possible Payouts<BR>
Under Non-Equity Incentive<BR>
Plan Awards(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Estimated Future Payouts<BR>
Under Equity Incentive<BR>
Plan Awards(3)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" ROWSPAN=3 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Grant<BR>
Date Fair<BR>
Value of<BR>
Stock<BR>
Awards(5)<BR>
($)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=2 style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ROWSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Date of<BR>
Compensation<BR>
Committee<BR>
Action</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Grant<BR>
Date</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Threshold<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Target<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Maximum<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Threshold<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Target<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Maximum<BR>
(#)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=25 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>David R.<BR>
Emery</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1/1/07<BR>
1/5/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
12/4/06<BR>
12/4/06</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>114,450<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>381,500<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>763,000<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
82</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
8,163</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
14,285</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
8,224</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
278,930<BR>
305,193</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>Mark T.<BR>
Thies</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1/1/07<BR>
1/5/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
12/4/06<BR>
12/4/06</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>34,644<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>115,480<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>230,960<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
29</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,861</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
5,007</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
2,973</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
97,760<BR>
110,328</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>Thomas M.<BR>
Ohlmacher</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1/1/07<BR>
1/5/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
12/4/06<BR>
12/4/06</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>51,090<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>170,300<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>340,600<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
52</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
5,170</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
9,048</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
5,120</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
176,659<BR>
190,003</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>Linden R.<BR>
Evans</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1/1/07<BR>
1/5/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
12/4/06<BR>
12/4/06</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>38,025<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>126,750<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>253,500<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
33</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
3,252</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
5,691</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
3,220</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
111,121<BR>
119,494</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>Steven J.<BR>
Helmers</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
1/1/07<BR>
1/5/07</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
12/4/06<BR>
12/4/06</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,269<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>90,895<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR></FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>181,790<BR></FONT>
</TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
22</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
2,189</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
3,831</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
2,308</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
74,798<BR>
85,650</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=25 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>No
stock options were granted to our Named Executive Officers in 2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
columns under "Estimated Possible Payouts Under Non-Equity Incentive Plan Awards" show the range of payouts for 2007 performance under the Short-Term
Annual Incentive Compensation Program as described in the Compensation Discussion and Analysis under the section titled "Annual Incentive." If the performance criteria is met, payouts can range from
30&nbsp;percent of target at the threshold level to 200&nbsp;percent of target at the maximum level. The 2008 bonus payment for 2007 performance has been made based on achieving the criteria
described in the Compensation Discussion and Analysis, at 200&nbsp;percent of target, and is shown in the Summary Compensation Table in the column titled "Non-Equity Incentive Plan
Compensation."
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
columns under "Estimated Future Payouts Under Equity Incentive Plan Awards" show the range of payouts (in shares of stock) for the January&nbsp;1, 2007 to December&nbsp;31,
2009 performance period as described in the Compensation Discussion and Analysis under the section titled "Long-Term Incentive&#151;</FONT><FONT SIZE=2><I>Performance
Shares</I></FONT><FONT SIZE=2>." If the performance criteria are met, payouts can range from 1&nbsp;percent of target to 175&nbsp;percent of target. If a participant retires, suffers a disability
or dies during the performance period, the participant or the participant's estate is entitled to that portion of the number of performance shares as such participant would have been entitled to had
he or she remained employed, prorated for the number of months served. Performance shares are forfeited if employment is terminated for any other reason. During the performance period, dividends and
other distributions paid with respect to the shares of common stock shall accrue for the benefit of the participant and are paid out at the end of the performance period.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
column "All Other Stock Awards" reflects the number of shares of restricted stock granted on January&nbsp;5, 2007 under our 2005 Omnibus Incentive Plan. The restricted stock
vests one-third a year over a three-year period, and automatically vests upon death, disability, retirement or a change in control. Unvested restricted stock is forfeited if
employment is terminated for any other reason. Dividends are paid on the restricted shares and the dividends that were paid in 2007 are included in the column titled "All Other Compensation" in the
Summary Compensation Table.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
column "Grant Date Fair Value of Stock Awards" reflects the grant date fair value of each equity award computed in accordance with FAS&nbsp;123(R). The grant date fair value for
the performance shares was $34.17 per share and was calculated using a Monte Carlo simulation model. Assumptions used in the calculation are included in Note&nbsp;9 of the Notes to the Consolidated
Financial Statements in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2007. The grant date fair value for the restricted stock was $37.11 per share which was
the market value of our common stock on the date of grant as reported on the New York Stock Exchange.
<A NAME="ci17401_outstanding_equity_awards_at_fiscal_year-end_2007"> </A>
<A NAME="toc_ci17401_2"> </A></FONT></DD></DL>
<BR>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=30,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=280144,FOLIO='25',FILE='DISK123:[08ZAW1.08ZAW17401]CI17401A.;21',USER='VSTEFAN',CD=';1-APR-2008;21:52' -->
<A NAME="page_ci17401_1_26"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007(1)  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=18 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="20%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=6 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock Awards</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="20%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options<BR>
Exercisable<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
Exercise<BR>
Price<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option<BR>
Expiration<BR>
Date</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number of<BR>
Shares or<BR>
Units of<BR>
Stock That<BR>
Have Not<BR>
Vested(2)<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Market<BR>
Value of<BR>
Shares or<BR>
Units of<BR>
Stock<BR>
That Have<BR>
Not Vested<BR>
($)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Equity<BR>
Incentive<BR>
Plan<BR>
Awards:<BR>
Number of<BR>
Unearned<BR>
Shares,<BR>
Units or<BR>
Other Rights<BR>
That Have<BR>
Not<BR>
Vested(2)(3)<BR>
(#)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Equity<BR>
Incentive<BR>
Plan<BR>
Awards:<BR>
Market or<BR>
Payout<BR>
Value of<BR>
Unearned<BR>
Shares,<BR>
Units or<BR>
Other<BR>
Rights That<BR>
Have Not<BR>
Vested<BR>
($)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=18 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,000<BR>
8,000<BR>
30,000<BR>
5,000<BR>
4,595<BR>
7,500<BR>
13,787</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$<BR>$<BR>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22.0000<BR>
24.0625<BR>
21.8750<BR>
55.3600<BR>
35.1000<BR>
27.4900<BR>
28.0900</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4/21/08<BR>
7/20/09<BR>
4/25/10<BR>
5/30/11<BR>
4/23/12<BR>
3/31/13<BR>
5/15/13</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,658</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>690,518</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>41,445</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,818,810</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>8,000<BR>
25,000<BR>
6,665<BR>
18,382</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>24.0625<BR>
21.8750<BR>
35.1000<BR>
28.0900</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7/20/09<BR>
4/25/10<BR>
4/23/12<BR>
5/15/13</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,119</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>269,848</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16,844</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>738,685</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>2,500</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>55.3600</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>5/30/11</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>10,804</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>476,456</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>30,436</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>1,334,712</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,000<BR>
3,000<BR>
5,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>32.3400<BR>
25.1600<BR>
29.8300</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6/17/12<BR>
12/10/12<BR>
12/31/13</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,808</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>300,233</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,193</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>841,671</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="20%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,000<BR>
10,110</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>55.3600<BR>
35.1000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5/30/11<BR>
4/23/12</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,708</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>207,623</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,848</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>563,406</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>There
were no unexercisable stock options or unexercised unearned options under equity incentive plans outstanding at December&nbsp;31, 2007 for our Named Executive Officers.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Vesting
dates for restricted stock, restricted stock units and performance shares are shown in the table below. The performance shares shown with a vesting date of December&nbsp;31,
2007, are the actual equivalent shares, including dividend equivalents, earned for the performance period ended December&nbsp;31, 2007. The Compensation Committee must confirm that the performance
criteria </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ci17401_1_27"> </A>
<UL>

<P style="font-family:times;"><FONT SIZE=2>have
been met and approve the actual payout of the performance share award. This was done on January&nbsp;31, 2008. </FONT></P>

</UL>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="46%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Unvested Restricted Stock and Restricted Stock Units</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Unvested and Unearned Performance Shares</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="46%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B># of Shares</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Vesting Date</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B># of Shares</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Vesting Date</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=9 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,741<BR>
4,968<BR>
2,741<BR>
2,466<BR>
2,742</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1/05/08<BR>
1/06/08<BR>
1/05/09<BR>
1/06/09<BR>
1/05/10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,339<BR>
12,821<BR>
14,285</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12/31/07<BR>
12/31/08<BR>
12/31/09</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>991<BR>
2,158<BR>
991<BR>
988<BR>
991</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1/05/08<BR>
1/06/08<BR>
1/05/09<BR>
1/06/09<BR>
1/05/10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,701<BR>
5,136<BR>
5,007</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12/31/07<BR>
12/31/08<BR>
12/31/09</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,706<BR>
3,899<BR>
1,707<BR>
1,785<BR>
1,707</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1/05/08<BR>
1/06/08<BR>
1/05/09<BR>
1/06/09<BR>
1/05/10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12,108<BR>
9,280<BR>
9,048</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12/31/07<BR>
12/31/08<BR>
12/31/09</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,073<BR>
2,461<BR>
1,073<BR>
1,127<BR>
1,074</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1/05/08<BR>
1/06/08<BR>
1/05/09<BR>
1/06/09<BR>
1/05/10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,643<BR>
5,859<BR>
5,691</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12/31/07<BR>
12/31/08<BR>
12/31/09</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>769<BR>
1,644<BR>
769<BR>
756<BR>
770</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1/05/08<BR>
1/06/08<BR>
1/05/09<BR>
1/06/09<BR>
1/05/10</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,088<BR>
3,929<BR>
3,831</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>12/31/07<BR>
12/31/08<BR>
12/31/09</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Performance
shares with a vesting date of December&nbsp;31, 2007, reflect the equivalent shares earned, including dividend equivalents. Performance shares with a vesting date of
December&nbsp;31, 2008 and 2009 are shown at the maximum payout level since our performance for the performance period ended December&nbsp;31, 2007 resulted in a maximum payout. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ci17401_option_exercises_and_stock_vested_during_2007"> </A>
<A NAME="toc_ci17401_3"> </A>
<BR></FONT><FONT SIZE=2><B>OPTION EXERCISES AND STOCK VESTED DURING 2007    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="94%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="21%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Option Awards</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock Awards(1)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="21%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number&nbsp;of&nbsp;Shares<BR>
Acquired&nbsp;on&nbsp;Exercise&nbsp;(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Value&nbsp;Realized<BR>
on&nbsp;Exercise&nbsp;($)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="22%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number&nbsp;of&nbsp;Shares<BR>
Acquired&nbsp;on&nbsp;Vesting&nbsp;(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Value&nbsp;Realized<BR>
on&nbsp;Vesting&nbsp;($)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>9,082</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>346,322</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies(2)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,214</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>161,018</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher(2)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>25,526</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>208,471</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,703</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>294,444</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,893</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>108,322</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="21%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>22,408</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>260,140</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="22%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,032</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>115,655</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Reflect
(i)&nbsp;equivalent performance shares earned and the value realized for the March&nbsp;1, 2004 to December&nbsp;31, 2006 performance period that was paid on
February&nbsp;17, 2007, and (ii)&nbsp;restricted stock and restricted stock units that vested in 2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Value
Realized on Vesting includes $47,603 for Mr.&nbsp;Thies and $88,080 for Mr.&nbsp;Ohlmacher for the vesting of restricted stock units that were deferred into the Nonqualified
Deferred Compensation Plan. </FONT></DD></DL>
<BR>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=32,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=758006,FOLIO='27',FILE='DISK123:[08ZAW1.08ZAW17401]CI17401A.;21',USER='VSTEFAN',CD=';1-APR-2008;21:52' -->
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_ck17401_1_28"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="ck17401_pension_benefits_for_2007"> </A>
<A NAME="toc_ck17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>PENSION BENEFITS FOR 2007    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension benefits for our Named Executive Officers can be comprised of a qualified defined benefit pension, a nonqualified pension restoration benefit and a
supplemental pension benefit. None of our Named Executive Officers received any pension benefit payments during the fiscal year ended December&nbsp;31, 2007. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="31%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="27%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Plan&nbsp;Name</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number&nbsp;of&nbsp;Years<BR>
of&nbsp;Credited<BR>
Service(1)&nbsp;(#)</B></FONT><BR></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Present&nbsp;Value<BR>
of&nbsp;Accumulated<BR>
Benefit(2)&nbsp;($)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Defined&nbsp;Benefit&nbsp;Pension&nbsp;Plan<BR>
Pension Restoration Benefit<BR>
Pension Equalization Plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>18.17<BR>
18.17<BR>
12.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>194,396<BR>
422,907<BR>
637,670</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Defined Benefit Pension Plan<BR>
Pension Restoration Benefit<BR>
Pension Equalization Plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10.42<BR>
10.42<BR>
10.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>96,548<BR>
80,501<BR>
352,757</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Defined Benefit Pension Plan<BR>
Pension Restoration Benefit<BR>
Pension Equalization Plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>33.25<BR>
33.25<BR>
15.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>752,183<BR>
1,201,742<BR>
1,058,541</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans(3)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Defined Benefit Pension Plan<BR>
Pension Restoration Benefit<BR>
2007&nbsp;Pension&nbsp;Equalization&nbsp;Plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.33<BR>
NA<BR>
2.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>58,199<BR>
NA<BR>
38,994</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="31%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="27%" style="font-family:times;"><FONT SIZE=2>Defined Benefit Pension Plan<BR>
Pension Restoration Benefit<BR>
Pension Equalization Plan</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6.67<BR>
6.67<BR>
6.00</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$<BR>$<BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>92,467<BR>
51,058<BR>
478,497</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
number of years of credited service represents the number of years used in determining the benefit for each plan. The Pension Equalization Plan and 2007 Pension Equalization Plan
benefits are not directly tied to service but rather the number of years of participation in the plan.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
present value of accumulated benefits was calculated assuming benefits commence at age 62 and using the discount rate, mortality rate and assumed payment form assumptions
consistent with those disclosed in Note&nbsp;17 of the Notes to the Consolidated Financial Statements in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Evans
is not a current participant in the Pension Restoration Benefit and is a participant in the 2007 Pension Equalization Plan rather than the original Pension
Equalization Plan. See the discussion on the plan benefits below. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B>Defined Benefit Pension Plan  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a Defined Benefit Retirement Plan, a qualified pension plan, in which our Named Executive Officers are included. Participants become eligible for the
benefit when they have been employed by us for at least one year and are at least 21&nbsp;years of age. The plan provides benefits at retirement based on length of employment service and average
compensation levels during the highest five consecutive years of the last ten years of service. For purposes of the benefit calculation, earnings include wages and other cash compensation received
from the Company, including any bonus, commission, unused paid time off or incentive compensation. It also includes any elective before-tax contributions made by the employee to a Company
sponsored cafeteria plan or 401(k) plan. However, it does not include any expense reimbursements, taxable fringe benefits, moving expenses or moving/relocation allowances, nonqualified deferred
compensation, non-cash incentives, stock options and any payments of long-term incentive compensation such as restricted stock or payments under performance share plans. The
Internal Revenue Code places maximum limitations on the amount of compensation </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>28</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ck17401_1_29"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>that
may be recognized when determining benefits of qualified pension plans. In 2007, the maximum amount of compensation that could be recognized when determining compensation was $225,000 (called
"covered compensation"). </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
benefit formula for the Named Executive Officers is the sum of (a)&nbsp;and (b)&nbsp;below. </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Credited
Service after January&nbsp;31, 2000 </FONT></DD></DL>
</UL>
<BR>

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<DIV ALIGN="CENTER"><TABLE WIDTH="82%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>0.9% of average earnings (up to covered compensation), multiplied by credited service after January&nbsp;31, 2000, limited to a maximum of 35&nbsp;years minus the number of years of credited service before January&nbsp;31,
2000</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Plus</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>1.3% of average earnings in excess of covered compensation, multiplied by credited service after January&nbsp;31, 2000, limited to a maximum of 35&nbsp;years minus the number of years of credited service before
January&nbsp;31, 2000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="42%" style="font-family:times;"><BR><FONT SIZE=2> Plus</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Credited
Service before January&nbsp;31, 2000 </FONT></DD></DL>
</UL>
<BR>

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<DIV ALIGN="CENTER"><TABLE WIDTH="82%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>1.2% of average earnings (up to covered compensation), multiplied by credited service before January&nbsp;31, 2000, limited to a maximum of 35&nbsp;years</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><BR>
Plus</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="44%" style="font-family:times;"><FONT SIZE=2>1.6% of average earnings in excess of covered compensation, multiplied by credited service before January&nbsp;31, 2000, limited to a maximum of 35&nbsp;years</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension
benefits are not reduced for social security benefits. The Internal Revenue Code places maximum limitations on annual benefit amounts that can be paid under qualified pension
plans. In 2007, the maximum benefit payable under qualified pension plans was $180,000. Accrued benefits become 100&nbsp;percent vested after an employee completes five years of service. None of our
Named Executive Officers have been credited with extra years of credited service under the plan. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Normal
retirement is defined as age 65 under the plan. Participants who have completed at least five years of credited service can retire and receive defined benefit pension benefits as
early as age 55. However, the retirement benefit will be reduced by five percent for each year of retirement before age 62. For example, a participant with at least five years of credited service may
retire at age 55 and receive a pension benefit equal to 65&nbsp;percent of the normal retirement benefit. A participant with five years of service who retires from the Company may begin receiving
retirement benefits on an
unreduced basis at age 62. Mr.&nbsp;Ohlmacher is currently age 56 and is entitled to early retirement benefits under this provision. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a participant is vested and leaves the Company before reaching his or her earliest retirement date, he or she may begin receiving the full value of his or her vested benefit at age 65
or can receive a reduced benefit as early as age 55 if he or she has at least five years of credited service when he or she leaves employment of the Company. The benefit will be reduced by five
percent for each year he or she begins receiving benefits prior to age 65. For example, a participant who leaves the Company before reaching age 55 with at least five years of credited service may
begin receiving benefits at age 55 equal to 50&nbsp;percent of the normal retirement benefit and may begin receiving retirement benefits at age 65 on an unreduced basis. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a participant is single, the benefit is paid as a life annuity. If a participant is married, the benefit is paid as a joint and 50&nbsp;percent survivor annuity unless an optional
form of payment is chosen. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
employees do not contribute to the plan. The amount of the annual contribution by us to the plan is based on an actuarial determination. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>29</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ck17401_1_30"> </A>

<P style="font-family:times;"><FONT SIZE=2><B>Pension Equalization Plan, 2007 Pension Equalization Plan and Pension Restoration Benefit  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also have a Pension Equalization Plan, a 2007 Pension Equalization Plan and a Pension Restoration Benefit, nonqualified supplemental plans, in which benefits
are not tax deductible until paid. The plans are designed to provide the higher paid executive employee a retirement benefit which, when added to social security benefits and the pension to be
received under the Defined Benefit Pension Plan, will approximate retirement benefits being paid by other employers to its employees in similar executive positions. The employee's pension from the
qualified pension plan is limited by the Internal Revenue Code. The 2007 limit was set at $180,000 annually and the compensation taken into account in determining contributions and benefits could not
exceed $225,000 and could not include nonqualified deferred compensation. The amount of deferred compensation paid under nonqualified plans is not subject to these limits. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension Equalization Plan.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A participant under the Pension Equalization Plan does not qualify for
benefits until the benefits become vested under the following vesting schedule. The vesting is based on years of employment under the plan, not total years of service with the Company. No credit for
past service is granted under the Pension Equalization Plan. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="64%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Years&nbsp;of&nbsp;Plan&nbsp;Participation<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>%&nbsp;of&nbsp;Benefit&nbsp;Vested</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>Less than 3&nbsp;years</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>3&nbsp;years but less than 4</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>4&nbsp;years but less than 5</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>35</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>5&nbsp;years but less than 6</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>50</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>6&nbsp;years but less than 7</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>65</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>7&nbsp;years but less than 8</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="74%" style="font-family:times;"><FONT SIZE=2>8 or more years</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
annual benefit is 25&nbsp;percent of the employee's average earnings, if salary was less than two times the Social Security Wage Base, or 30&nbsp;percent, if salary was more than
two times the Social Security Wage Base, multiplied by the vesting percentage. Average earnings are normally an employee's 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 Pension Equalization Plan benefit is paid on a monthly basis for 15&nbsp;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&nbsp;years of age or more. A
participant with vested benefits who is 55&nbsp;years of age or older and no longer an employee of the Company may elect to be paid benefits beginning at age 55 or older, subject to a discount of
such benefits according to the following schedule. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="64%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="76%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Age&nbsp;at&nbsp;Start&nbsp;of&nbsp;Payments<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="19%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>%&nbsp;of&nbsp;Benefit&nbsp;Payable</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>61</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>93.0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>60</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>86.5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>59</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>80.5</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>58</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>74.9</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>57</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>69.7</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>56</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>64.8</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="76%" style="font-family:times;"><FONT SIZE=2>55</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="19%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60.3</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participants
in the Pension Equalization Plan were designated by our Board of Directors upon recommendation of the Chief Executive Officer. Mr.&nbsp;Emery, Mr.&nbsp;Thies,
Mr.&nbsp;Ohlmacher and Mr.&nbsp;Helmers are participants in the Pension Equalization Plan. The Pension Equalization Plan has been frozen to new participants since 2002. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_ck17401_1_31"> </A>

<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2007 Pension Equalization Plan.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;During 2006 and 2007, the Compensation Committee reviewed the need to
offer some form of supplemental retirement plan to officers and concluded that a supplemental retirement plan was needed for corporate officers who were not participants in the original frozen Pension
Equalization Plan. In 2007, the Board of Directors approved the 2007 Pension Equalization Plan and designated the four corporate officers, including Mr.&nbsp;Evans, who were not participants in the
original Pension Equalization Plan as participants in the 2007 Pension Equalization Plan. The four participants were given years of credited service equal to the number of years they served as a
corporate officer. Mr.&nbsp;Evans received two years of credited service. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
participant under the 2007 Pension Equalization Plan does not qualify for benefits until the benefits become vested under the following vesting schedule. The vesting is based on age at
termination and years of service under the plan, not total years of service with the Company. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="65%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Age at Termination of Employment or Discontinuance of Participation<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Vesting&nbsp;%</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="82%" style="font-family:times;"><FONT SIZE=2>Under age 55</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="82%" style="font-family:times;"><FONT SIZE=2>Age 55 with less than 10&nbsp;years of service</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>0</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="82%" style="font-family:times;"><FONT SIZE=2>Age 55 with over 10&nbsp;years of service</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="82%" style="font-family:times;"><FONT SIZE=2>Age 65 or over</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="82%" style="font-family:times;"><FONT SIZE=2>Upon death or disability</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
annual benefit is 2&nbsp;percent of the employee's average earnings multiplied by the participant's years of service as an officer (up to a maximum of 15&nbsp;years) and the
vesting percentage. Average earnings are normally an employee's 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 2007 Pension Equalization Plan benefit is paid on a monthly basis for 15&nbsp;years to each participating employee commencing at the later of 55&nbsp;years of
age or the date of the participant's termination of employment, unless the participant has elected otherwise. In the event of the participant's death before payment of the benefit begins, the vested
benefit shall commence at the later of the date the participant would have attained age 55&nbsp;years of age or the date of the participant's death. A participant or participant's beneficiary that
receives payments under the plan prior to the participant attaining age 62 (or in the case of a beneficiary, would have attained age 62)&nbsp;shall receive such benefits subject to a discount of
such benefits according to the same schedule as for the Pension Equalization Plan shown above. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension Restoration Benefit.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event that at the time of a participant's retirement, the
participant's salary level exceeds the qualified pension plan annual compensation limitation ($225,000 in 2007) or includes nonqualified deferred compensation, then the participant shall receive an
additional benefit, called a "Pension Restoration Benefit," which is measured by the difference between (i)&nbsp;the monthly benefit which would have been provided to the participant under the
Defined Benefit Pension Plan as
if there were no annual compensation limitation and no exclusion on nonqualified deferred compensation, and (ii)&nbsp;the monthly benefit to be provided to the participant under the Defined Benefit
Pension Plan. At the current time, the Pension Restoration Benefit only applies to participants in the Pension Equalization Plan. It does not apply to participants in the 2007 Pension Equalization
Plan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>31</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=36,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=1001060,FOLIO='31',FILE='DISK123:[08ZAW1.08ZAW17401]CK17401A.;12',USER='VSTEFAN',CD=';1-APR-2008;21:50' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="page_cm17401_1_32"> </A>


<!-- COMMAND=ADD_BASECOLOR,"Black" -->




<!-- COMMAND=ADD_DEFAULTFONT,"font-family:times;" -->


 </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cm17401_nonqualified_deferred_compensation_for_2007"> </A>
<A NAME="toc_cm17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>NONQUALIFIED DEFERRED COMPENSATION FOR 2007    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a Nonqualified Deferred Compensation Plan for a select group of management or highly compensated employees. The aggregate plan earnings for 2007 and the
aggregate balance as of December&nbsp;31, 2007 for our Named Executive Officers are shown in the following table. Our Named Executive Officers made no contributions and received no withdrawals or
distribution from the plan in 2007. In addition, we made no contributions to the plan in 2007. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="80%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="53%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregate<BR>
Earnings in<BR>
Last Fiscal Year<BR>
($)(1)</B></FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Aggregate<BR>
Balance at Last<BR>
Fiscal Year End<BR>
($)(1)</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=7 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,084</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>587,288</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,035</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,089,500</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<UL>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>No
contributions were made by the Named Executive Officers in 2006 or 2007 and none of the earnings met the definition of above-market or preferential earnings, therefore none of
these amounts are included in the Summary Compensation Table. </FONT></DD></DL>
</UL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eligibility
to participate in the plan is determined by the Compensation Committee and currently consists of only corporate officers. Eligible employees may elect to defer up to
50&nbsp;percent of their base salary, up to 100&nbsp;percent of their Short-Term Annual Incentive Plan award, including Company stock, and elect to defer restricted stock grants in the
form of restricted stock units. The deferrals are deposited into a trust account where the participants may direct the investment of the deferrals (except for Company stock and restricted stock unit
deferrals) as allowed by the plan. The investment options are the same as those offered to all employees in the 401(k) Plan except for a fixed rate option which was set at 5.6&nbsp;percent in 2007.
Investment earnings are credited to the participants' accounts. Upon retirement, we will distribute the account balance to the participant according to the distribution election filed with the
Compensation Committee. The participants may elect either a lump sum payment to be paid within 30&nbsp;days of retirement (requires a six month deferral for benefits not vested as of
December&nbsp;31, 2004), or annual or monthly installments over a period of years designated by the participant, but not to exceed 15&nbsp;years. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cm17401_potential_payments_upo__cm102385"> </A>
<A NAME="toc_cm17401_2"> </A>
<BR></FONT><FONT SIZE=2><B>POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table describes the potential payments and benefits under our compensation and benefit plans and arrangements to which our Named Executive Officers
would be entitled upon termination of employment. Except for certain terminations following a change in control of the Company, as described below; pro-rata payout of incentive
compensation and the acceleration of vesting of equity awards upon retirement, death or disability; and certain pension and nonqualified deferred compensation arrangements described under Pension
Benefits for 2007 and Nonqualified Deferred Compensation for 2007 above, there are no agreements, arrangements or plans that entitle the Named Executive Officers to severance, perquisites, or other
enhanced benefits upon termination of their employment. Any agreement to provide such other payments or benefits to a terminating executive officer would be in the discretion of the Compensation
Committee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
amounts shown below assume that such termination was effective as of December&nbsp;31, 2007, and thus include estimates of the amounts which would be paid out to our Named
Executive Officers upon their termination. The table does not include amounts such as base salary, short-term incentives and stock awards which the Named Executive Officers earned due to
employment through December&nbsp;31, 2007 and distributions of vested benefits such as those described under Pension Benefits </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>32</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=37,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=362943,FOLIO='32',FILE='DISK123:[08ZAW1.08ZAW17401]CM17401A.;16',USER='DSCHWAR',CD='31-MAR-2008;16:21' -->
<A NAME="page_cm17401_1_33"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>for
2007, Nonqualified Deferred Compensation for 2007 and vested stock options listed in the Outstanding Equity Awards at Fiscal Year-End 2007 tables. The table also does not include a
value for outplacement services because this would be a diminimus amount. The actual amounts to be paid out can only be determined at the time of such Named Executive Officer's separation from the
Company. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Cash<BR>
Severance<BR>
Payment</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Incremental<BR>
Pension<BR>
Benefit<BR>
(present<BR>
value)(2)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Continuation<BR>
of Medical/<BR>
Welfare<BR>
Benefits<BR>
(present<BR>
value)(3)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Acceleration<BR>
of Equity<BR>
Awards(4)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Excise Tax<BR>
and Gross-up(5)</B></FONT><BR></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total<BR>
Termination<BR>
Benefits</B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=20 ALIGN="CENTER" style="font-family:times;"><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>David R. Emery</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Retirement, death, or disability</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,038,049</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,038,049</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary termination</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Change in Control ("CIC")</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,032,614</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,032,614</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary or good reason termination after CIC(1)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,427,354</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>668,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>330,400</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,032,614</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>955,774</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,414,142</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=20 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Retirement, death, or disability</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>402,959</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>402,959</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary termination</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>CIC</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>396,192</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>396,192</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary or good reason termination after CIC(1)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>702,012</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>59,600</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>281,100</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>396,192</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,438,904</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=20 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Retirement, death or disability</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>716,974</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>716,974</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary termination</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>CIC</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>704,755</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>704,755</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary or good reason termination after CIC(1)(6)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,040,304</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100,700</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>83,500</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>704,755</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,929,259</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=20 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Retirement, death or disability</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>451,902</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>451,902</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary termination</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>CIC</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>444,053</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>444,053</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary or good reason termination after CIC(1)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>437,020</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>20,481</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>260,600</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>444,053</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>261,457</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,423,611</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=20 style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Retirement, death or disability</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>309,449</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>309,449</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary termination</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>CIC</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>304,280</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>304,280</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Involuntary or good reason termination after CIC(1)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>597,562</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>250,500</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>198,000</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>304,280</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,350,342</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=20 style="font-family:times;"><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
amounts reflected for involuntary or good reason termination after a change in control include the benefits a Named Executive Officer would receive in the event of a change in
control as a sole event without the involuntary or good reason termination.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Assumes
that in the event of a change in control, Mr.&nbsp;Emery will receive an additional three years of credited and vesting service and the other Named Executive Officers will
receive an additional two years of credited and vesting service towards the benefit accrual under the Defined Benefit Pension Plan, Pension Restoration Benefit, Pension Equalization Plan and 2007
Pension Equalization Plan. Assumes that each Named Executive Officer's pension compensation for the additional years of credited service is equal to the highest rate of salary earned in the one year
period prior to the change in control.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Welfare
benefits include medical coverage, dental coverage, life insurance, short-term disability coverage and long-term disability coverage. The calculation
assumes that the Named Executive Officer does not take employment with another employer following termination and that the Named Executive Officer elects </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>33</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cm17401_1_34"> </A>
<UL>

<P style="font-family:times;"><FONT SIZE=2>continued
welfare benefits until retirement and retiree medical benefits thereafter. Retirement is assumed to occur at age 65 for all the Named Executive Officers except Mr.&nbsp;Ohlmacher for which
we have assumed retirement will occur at age 62 because he is already retiree eligible (see Note&nbsp;6 to this table). </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>In
the event of retirement, death or disability, the acceleration of equity awards represents the acceleration of unvested restricted stock, the payout of the pro-rata
share of the performance shares calculated at target levels for the January&nbsp;1, 2006 to December&nbsp;31, 2008 and January&nbsp;1, 2007 to December&nbsp;31, 2009 performance periods.
<BR></FONT></DD></DL>
<UL>

<P style="font-family:times;"><FONT SIZE=2>In the event of a change in control or an involuntary or good reason termination after a change in control, the acceleration of equity awards represents the
acceleration of unvested restricted stock, the payout of the pro-rata share of the performance shares calculated as if the performance period ended on December&nbsp;31, 2007 for the
January&nbsp;1, 2006 to December&nbsp;31, 2008 and January&nbsp;1, 2007 to December&nbsp;31, 2009 performance periods. <BR></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>The valuation of the restricted stock was based upon the closing price of our common stock on December&nbsp;31, 2007 and the valuation of the performance
shares was based on the average closing price of our common stock for the last 20 trading days of 2007. Actual amounts to be paid out at the time of separation from the Company may vary significantly
based upon the market value of our common stock at that time. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
calculation of the excise tax and gross-up amount is based on the Internal Revenue Code Section&nbsp;4999 excise tax rate of 20&nbsp;percent, a 35&nbsp;percent
federal income tax rate, a 1.45&nbsp;percent Medicare tax rate and a 4.63&nbsp;percent Colorado state income tax rate that applies to Mr.&nbsp;Ohlmacher only.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Because
Mr.&nbsp;Ohlmacher is age 56, he is already retiree eligible. Therefore, in the event of a change in control he can begin receiving pension benefits on an undiscounted basis
at age 62. The calculations assume he will continue to receive active welfare benefits until age 62 and that he will begin receiving pension benefits at that time. The other Named Executive Officers
are not retiree eligible, therefore the calculations assume they will continue to receive active welfare benefits until age 65 and that they will begin receiving pension benefits at that time. </FONT></DD></DL>

<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments Made Upon Termination.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Regardless of the manner in which a Named Executive Officer's
employment terminates, he may be entitled to receive amounts earned during his term of employment. These include: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>accrued
salary and unused vacation pay;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>amounts
vested under the Defined Benefit Pension Plan, Pension Equalization Plan, 2007 Pension Equalization Plan and the Pension Restoration Benefit;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>amounts
vested under the Nonqualified Deferred Compensation Plan; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>amounts
vested under the 401(k) Retirement Savings Plan. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments Made Upon Retirement, Death or Disability.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event of retirement, death or disability
of a Named Executive Officer, in addition to the items identified above, he will also receive the benefit of the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>accelerated
vesting of unvested stock options;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>accelerated
vesting of restricted stock and restricted stock units;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
pro-rata share of the performance shares for each outstanding performance period upon completion of the performance period; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
pro-rata share of the Short-Term Annual Incentive Plan upon completion of the annual incentive period. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments Made Upon a Change in Control.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our Named Executive Officers have change in control
agreements that terminate June&nbsp;1, 2008. The renewal of the change in control agreements is at the discretion of the Compensation Committee and the Board of Directors. The Compensation Committee </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>34</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cm17401_1_35"> </A>

<P style="font-family:times;"><FONT SIZE=2>is
conducting a thorough review of the agreements before the June&nbsp;1, 2008 termination date. The change in control agreements provide for certain payments and other benefits to be payable upon a
change in control and a subsequent termination of employment, either involuntary or for a good reason. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
change in control is defined in the agreements as: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an
acquisition of 30&nbsp;percent or more of our common stock, except for certain defined acquisitions, such as acquisition by employee benefit plans, us, any of our
subsidiaries, or acquisition by an underwriter holding the securities in connection with a public offering thereof; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>members
of our incumbent Board of Directors at the time the agreements were executed cease to constitute at least two-thirds of the members of the Board of
Directors, with the incumbent Board of Directors being defined as those individuals consisting of the Board of Directors on the date the agreement was executed and any other directors elected
subsequently whose election was approved by the incumbent Board of Directors; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>approval
by our shareholders of:
<BR><BR></FONT>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
merger, consolidation, or reorganization;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>liquidation
or dissolution; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an
agreement for sale or other disposition of 50&nbsp;percent or more of our assets, with exceptions for transactions which do not involve an effective change in control
of voting securities or Board of Directors membership, and transfers to subsidiaries or sale of subsidiaries; and
<BR><BR></FONT></DD></DL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all
regulatory approvals required to effect a change in control have been obtained and the transaction constituting the change in control has been consummated. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the change in control agreements, a good reason for termination which would trigger payment of benefits is defined to include: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
material reduction of the executive's authority, duties or responsibilities;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
reduction in the executive's annual compensation or any failure to pay the executive any compensation or benefits to which he or she is entitled within seven days of the
date due;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>any
material breach by us of any provisions of the change in control agreement;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>requiring
the executive to be based outside a 50-mile radius from his or her usual and normal place of work; or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>our
failure to obtain an agreement, satisfactory to the executive, from any successor company to assume and agree to perform the change in control agreement. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
a change in control, the CEO will have an employment contract for a three-year period and the non-CEO executive will have an employment contract for a
two-year period, but not beyond age 65 ("employment term"). During this employment term, the executive shall receive annual compensation at least equal to the highest rate in effect at any
time during the one-year period preceding the change in control and shall also receive employment welfare benefits, pension benefits, and supplemental retirement benefits on a basis no
less favorable than those received prior to the change in control. Annual compensation is defined to include amounts which are includable in the gross income of the executive for federal income tax
purposes, including base salary, targeted annual incentive bonus, targeted long-term incentive grants and awards; and matching contributions or other benefits payable </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>35</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cm17401_1_36"> </A>

<P style="font-family:times;"><FONT SIZE=2>under
the 401(k) Retirement Savings Plan; but exclude restricted stock awards, performance units or stock options that become vested or exercisable pursuant to a change in control. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a Named Executive Officer's employment is terminated prior to the end of the employment term by the Company for cause or disability, by reason of the Named Executive Officer's death,
or by the Named Executive Officer without good reason, the Named Executive Officer will receive all amounts of compensation earned or accrued through the termination date. If the Named Executive
Officer's employment is terminated because of death or disability, the Named Executive Officer or his beneficiaries will also receive a pro rata bonus equal to 100&nbsp;percent of the target bonus
for the portion of the year served. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the CEO's employment is terminated during the employment term (other than by reason of death) (i)&nbsp;by the Company other than for cause or disability, (ii)&nbsp;by the CEO for
a good reason, or (iii)&nbsp;by the CEO for any reason during a 30-day window period immediately following the first anniversary of a change in control, then the CEO is entitled to the
following benefits: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all
accrued compensation and a pro rata bonus (the same as the CEO or the CEO's beneficiaries would receive in the event of death or disability discussed above);
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>severance
pay equal to 2.99 times the CEO's five-year average severance compensation defined as the CEO's base salary and annual incentive payment plus any
discretionary bonuses paid in cash or vested stock on a calendar-year basis; provided that if the CEO has attained the age of 62 on the termination date, the severance payment shall be
adjusted for the ratio of the number of days remaining to the CEO's 65<SUP>th</SUP>&nbsp;birthday to 1,095&nbsp;days;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>continuation
of employee welfare benefits for three years following the termination date unless the CEO becomes covered under the health insurance coverage of a subsequent
employer which does not contain any exclusion or limitation with respect to any preexisting condition of the CEO or the CEO's eligible dependents;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>following
the three-year period, the CEO may elect to receive coverage under the employee welfare plans of the successor entity at his then-current
level of benefits (or reduced coverage at the CEO's election) by paying the premiums charged to regular full-time employees for such coverage, and is eligible to continue receiving such
coverage through the date of his retirement;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>coverage
under the successor entity's retiree health insurance coverage if the CEO elected the continuation of employee welfare plan coverage through the date of his
retirement;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>three
years of additional credited service under the Pension Equalization Plan and Defined Benefit Pension Plan; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>outplacement
assistance services for up to six months. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the non-CEO executive's employment is terminated during the employment term (other than by death) (i)&nbsp;by the Company other than for cause or disability, or
(ii)&nbsp;by the non-CEO for a good reason; then the non-CEO is entitled to the following benefits: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>all
accrued compensation and a pro rata bonus (the same as the non-CEO or the non-CEO's beneficiaries would receive in the event of death or
disability discussed above);
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>severance
pay equal to two times the non-CEO's five-year average severance compensation defined as the non-CEO's base salary and annual
incentive payment plus any discretionary bonuses paid in cash or vested stock on a calendar-year basis; provided that if the non-CEO has attained the age of
63 on the termination date, the severance payment shall be adjusted for the ratio of the number of days remaining to the non-CEO's 65<SUP>th</SUP>&nbsp;birthday to 730&nbsp;days; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_cm17401_1_37"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>continuation
of employee welfare benefits for two years following the termination date unless the non-CEO becomes covered under the health insurance coverage of
a subsequent employer which does not contain any exclusion or limitation with respect to any preexisting condition of the non-CEO or the non-CEO's eligible dependents;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>following
the two-year period, the non-CEO may elect to receive coverage under the employee welfare plans of the successor entity at his
then-current level of benefits (or reduced coverage at the non-CEO's election) by paying the premiums charged to regular full-time employees for such coverage, and
is eligible to continue receiving such coverage through the date of his retirement;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>coverage
under the successor entity's retiree health insurance coverage if the non-CEO elected the continuation of employee welfare plan coverage through the
date of his retirement;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>two
years of additional credited service under the Pension Equalization Plan or 2007 Pension Equalization Plan and the Defined Benefit Pension Plan; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>outplacement
assistance services for up to six months. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
change in control agreements contain an additional benefit to cover any excise tax imposed by Section&nbsp;4999 of the Internal Revenue Code of 1986. The executive must sign a
waiver and release agreement in order to receive the severance payment. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cm17401_severance_agreement"> </A>
<A NAME="toc_cm17401_3"> </A>
<BR></FONT><FONT SIZE=2><B>SEVERANCE AGREEMENT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;18, 2008, we entered into a Severance and Release Agreement with Mark T. Thies, whose resignation from the Company occurred on that date.
The agreement provides for payment of a severance amount of $350,000, reimbursement of COBRA premium cost of continued healthcare coverage for a period of twelve months and outplacement assistance. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cm17401_director_compensation"> </A>
<A NAME="toc_cm17401_4"> </A>
<BR></FONT><FONT SIZE=2><B>DIRECTOR COMPENSATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Director Fees  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, our non-employee director compensation was as follows: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an
annual cash retainer of $36,000, paid on a monthly basis;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>common
stock equivalents equal to $36,000 per year, paid on a quarterly basis;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>dividend
equivalents on the common stock equivalents equal to the same dividend rate our shareholders receive; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
meeting fee of $1,250 for each board and committee meeting attended, provided such committee meetings are substantive in nature and content. </FONT></DD></DL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, our Presiding Director and Committee Chairpersons received the following additional compensation: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Presiding
Director&#151;an annual fee of $12,000;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Audit
Committee Chairperson&#151;an annual fee of $10,000; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Compensation
and Governance Committee Chairpersons&#151;annual fees of $6,000. </FONT></DD></DL>
</UL>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective
January&nbsp;1, 2008, our non-employee director compensation was increased to the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>an
annual cash retainer of $36,000, paid on a monthly basis;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>common
stock equivalents equal to $50,000 per year, paid on a quarterly basis;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>dividend
equivalents on the common stock equivalents equal to the same dividend rate our shareholders receive; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>a
meeting fee of $1,250 for each board and committee meeting attended, provided such committee meetings are substantive in nature and content. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>37</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<UL>
<UL>
</UL>
</UL>
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<P style="font-family:times;"><FONT SIZE=2><A
NAME="page_co17401_1_38"> </A>


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<P style="font-family:times;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, our Presiding Director and Committee Chairpersons will receive the following additional compensation: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Presiding
Director&#151;an annual fee of $15,000;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Audit
Committee Chairperson&#151;an annual fee of $10,000; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Compensation
and Governance Committee Chairpersons&#151;annual fees of $6,000. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2><B>Director Stock Ownership Guidelines  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Members of our Board of Directors are required to beneficially own 500 shares of common stock when they are initially elected a director and to apply at least
50&nbsp;percent of his or her annual cash retainer toward the purchase of additional shares until the director has accumulated at least 4,000 shares of common stock. All of our directors have
currently met their stock ownership guidelines. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>Director Total Compensation for 2007 and Common Stock Equivalents Outstanding as of December&nbsp;31, 2007(1)  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="97%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="37%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name(2)<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Fees&nbsp;Earned<BR>
or Paid<BR>
in&nbsp;Cash</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Stock<BR>
Awards(3)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Number&nbsp;of<BR>
Common&nbsp;Stock<BR>
Equivalents<BR>
Outstanding&nbsp;at<BR>
December&nbsp;31,&nbsp;2007(4)</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>David C. Ebertz</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>64,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>100,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,143</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Jack W. Eugster</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>67,375</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>103,375</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,696</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>John R. Howard</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>73,250</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>109,250</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,967</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Kay S. Jorgensen</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>111,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,926</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Richard Korpan(5)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,375</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,375</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,821</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Stephen D. Newlin</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>61,625</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>97,625</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,884</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Gary L. Pechota(6)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>39,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>21,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>60,750</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>440</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Warren L. Robinson(6)</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>48,250</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>75,250</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>590</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>John B. Vering</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>66,625</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>102,625</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,150</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="37%" style="font-family:times;"><FONT SIZE=2>Thomas J. Zeller</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>74,125</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>36,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>110,125</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,495</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Our
directors did not receive any option awards, non-equity incentive plan compensation, pension benefits or perquisites in 2007.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Emery,
our CEO, is not included in this table as he is an employee of the Company and thus receives no compensation for his services as a director. Mr.&nbsp;Emery's
compensation received as an employee is shown in the Summary Compensation Table for our Named Executive Officers.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Each
non-employee director received a quarterly award of common stock equivalents with a grant date fair value of $9,000 a quarter or $36,000 a year.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
common stock equivalents are fully vested in that they are not subject to forfeiture; however, the shares are not issued until after the director ends his or her service on the
Board. The common stock equivalents are payable in stock or cash or can be deferred further at the election of the director.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Korpan
did not seek reelection and resigned as a member of our Board of Directors effective May&nbsp;22, 2007, consequently his fees earned and stock award fair value
reflect a partial year of service.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Mr.&nbsp;Robinson
and Mr.&nbsp;Pechota became members of our Board of Directors effective April&nbsp;1, 2007 and May&nbsp;22, 2007, respectively, consequently their fees
earned and stock award fair values reflect partial years of service. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>38</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=43,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=707267,FOLIO='38',FILE='DISK123:[08ZAW1.08ZAW17401]CO17401A.;8',USER='DSCHWAR',CD='31-MAR-2008;16:12' -->
<A NAME="page_co17401_1_39"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_security_ownership_of___co102471"> </A>
<A NAME="toc_co17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables set forth the beneficial ownership of our common stock as of March&nbsp;14, 2008 for each director, each executive officer named in the
Summary Compensation Table, all of our directors and executive officers as a group, and each person or entity known by us to beneficially own more than five percent of our outstanding shares of common
stock. Beneficial ownership includes shares a director or executive officer has the power to vote or transfer, and stock options that are exercisable currently or within 60&nbsp;days of
March&nbsp;14, 2008. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise indicated by footnote below, we believe that each individual or entity named has sole investment and voting power with respect to the shares of common stock indicated
as beneficially owned by that individual or entity. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="95%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name of Beneficial Owner<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Shares&nbsp;of<BR>
Common Stock<BR>
Beneficially<BR>
Owned(1)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Options<BR>
Exercisable<BR>
Within<BR>
60&nbsp;Days</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Directors<BR>
Common<BR>
Stock<BR>
Equivalents(2)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Total</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Percentage(3)</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><I>Directors and Named Executive&nbsp;Officers</I></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
David C. Ebertz</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
5,878</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
5,513</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
11,391</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>David R. Emery(4)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>71,116</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>68,882</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>139,998</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Jack W. Eugster</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,042</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,042</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Linden R. Evans</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>23,671</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,000</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>33,671</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Steven J. Helmers(5)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>27,002</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>19,110</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>46,112</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>John R. Howard</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>16,864</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>11,393</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>28,257</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Kay S. Jorgensen</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>6,964</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>7,313</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>14,277</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Stephen D. Newlin</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,541</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,232</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,773</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Thomas M. Ohlmacher</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,544</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,500</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>43,044</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Gary L. Pechota</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,044</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>764</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,808</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Warren L. Robinson(6)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,580</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>915</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,495</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Mark T. Thies</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,834</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>15,834</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>John B. Vering(7)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,651</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,490</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,141</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>Thomas J. Zeller(8)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>4,428</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>5,868</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>10,296</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>All directors and executive officers as a group (20&nbsp;persons)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>333,314</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>252,684</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>40,530</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>626,528</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1.7</FONT></TD>
<TD WIDTH="1%" style="font-family:times;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Represents
less than one percent of the common stock outstanding.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
restricted stock held by the following executive officers for which they have voting power but not investment power and stock underlying restricted stock units the executive
officers have the right to acquire within 60&nbsp;days as to which they have no current voting or investment power: Mr.&nbsp;Emery&#151;15,119 shares; Mr.&nbsp;Evans&#151;6,130
shares; Mr.&nbsp;Helmers&#151;4,218 shares; Mr.&nbsp;Ohlmacher&#151;9,740 shares and 21,818 restricted stock units; Mr.&nbsp;Thies&#151;0 shares and 12,644 restricted stock
units; and all directors and executive officers as a group&#151;48,647 shares and 41,492 restricted stock units.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Represents
common stock allocated to the directors' accounts in the directors' stock based compensation plan, of which there are no voting rights.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Shares
of common stock which were not outstanding but could be acquired by a person upon exercise of an option within sixty days of March&nbsp;14, 2008, are deemed outstanding for
the purpose of computing the percentage of outstanding shares beneficially owned by such person. Such shares, however, are not deemed to be outstanding for the purpose of computing the percentage of
outstanding shares beneficially owned by any other person. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>39</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_co17401_1_40"> </A>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
54,611 shares owned jointly with Mr.&nbsp;Emery's spouse as to which he shares voting and investment authority and 4,500 shares that are pledged as security on a personal
bank loan.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
2,605 shares owned jointly with Mr.&nbsp;Helmers' spouse as to which he shares voting and investment authority.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
500 shares owned by Mr.&nbsp;Robinson's spouse.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
2,000 shares owned jointly with Mr.&nbsp;Vering's spouse as to which he shares voting and investment authority.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Includes
225 shares owned jointly with Mr.&nbsp;Zeller's spouse as to which he shares voting and investment authority. </FONT></DD></DL>
<BR>

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<TABLE WIDTH="85%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="67%" ALIGN="LEFT" style="font-family:times;"><FONT SIZE=1><B>Name of Beneficial Owner<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Shares&nbsp;of<BR>
Common Stock<BR>
Beneficially<BR>
Owned</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>Percentage</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%" style="font-family:times;"><FONT SIZE=2><I>Five Percent Shareholders</I></FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%" style="font-family:times;"><FONT SIZE=2><BR>
First Trust Portfolios&nbsp;L.P., First Trust Advisors&nbsp;L.P. and The Charger<BR>
Corporation(1)<BR>
1001 Warrenville Road<BR>
Lisle, IL 60532</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
4,396,113</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
11.6</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%" style="font-family:times;"><FONT SIZE=2><BR>
Barclays Global Investors, NA, Barclays Global Fund Advisors and Barclays<BR>
Global Investors Australia Limited, et. al.(2)<BR>
45 Fremont Street<BR>
San Francisco, CA 94105</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
4,001,748</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2><BR>
<BR>
10.6</FONT></TD>
<TD WIDTH="2%" style="font-family:times;"><FONT SIZE=2><BR><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="67%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
Lord, Abbett&nbsp;&amp;&nbsp;Co.&nbsp;LLC(3)<BR>
90 Hudson Street<BR>
Jersey City, NJ 07302</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
3,529,752</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
9.3</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="67%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
T. Rowe Price Associates,&nbsp;Inc.(4)<BR>
100 East Pratt Street<BR>
Baltimore, MD 21202</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
2,496,607</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>
6.6</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" style="font-family:times;"><FONT SIZE=2><BR>%</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Information
is as of December&nbsp;31, 2007, and is based on a Schedule&nbsp;13G filed on February&nbsp;8, 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Information
is as of December&nbsp;31, 2007, and is based on a Schedule&nbsp;13G filed on February&nbsp;5, 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Information
is as of December&nbsp;31, 2007 and is based on a Schedule&nbsp;13G filed on February&nbsp;14, 2008.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>Information
is as of December&nbsp;31, 2007 and is based on a Schedule&nbsp;13G filed on February&nbsp;13, 2008&#151;represents shares owned by various individual and
institutional investors which T. Rowe Price Associates,&nbsp;Inc. (Price Associates) serves as investment adviser with power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims
that it is, in fact, the beneficial owner of such securities. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>40</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_co17401_1_41"> </A>
<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_proposal_2_ratification_of_app__pro03499"> </A>
<A NAME="toc_co17401_2"> </A>
<BR></FONT><FONT SIZE=2><B>Proposal 2    <BR>    <BR>    RATIFICATION OF APPOINTMENT OF<BR>  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The firm of Deloitte&nbsp;&amp; Touche&nbsp;LLP, independent registered public accountants, conducted the audit of Black Hills Corporation and its subsidiaries
for 2007. Representatives of Deloitte&nbsp;&amp; Touche&nbsp;LLP will be present at our annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Audit Committee, subject to ratification by our shareholders, has appointed Deloitte&nbsp;&amp; Touche&nbsp;LLP to perform an audit of our consolidated financial statements and those
of our subsidiaries for the year 2008 and to render their reports. If shareholder approval for the appointment of Deloitte&nbsp;&amp; Touche&nbsp;LLP is not obtained, the Audit Committee will
reconsider the appointment. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>The Board of Directors recommends a vote </B></FONT><FONT SIZE=2><B><I>FOR</I></B></FONT><FONT SIZE=2><B> ratification of the appointment of Deloitte&nbsp;&amp; Touche&nbsp;LLP<BR>
to serve as our independent registered public accountants for the year 2008</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_fees_paid_to_the_independent_r__fee02483"> </A>
<A NAME="toc_co17401_3"> </A>
<BR></FONT><FONT SIZE=2><B>FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the aggregate fees for services provided to us for the fiscal years ended December&nbsp;31, 2007 and 2006 by our independent
registered public accounting firm, Deloitte&nbsp;&amp; Touche&nbsp;LLP. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="72%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2007</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%" style="font-family:times;"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;"><FONT SIZE=1><B>2006(1)</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Audit Fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,009,100</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>1,934,874</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Audit-Related Fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>271,465</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>324,610</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>Tax Fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>541,320</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>817,963</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT" style="font-family:times;"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%" style="font-family:times;"><FONT SIZE=2>Total Fees</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>2,821,885</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT" style="font-family:times;"><FONT SIZE=2>3,077,447</FONT></TD>
</TR>
</TABLE></DIV>
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<UL>
<UL>
<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>The
2006 amounts were adjusted from amounts shown in the 2007 proxy statement to reflect actual costs. </FONT></DD></DL>
</UL>
</UL>
<BR>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Fees for professional services rendered for the audits of our consolidated financial statements, review of the
interim consolidated financial statements included in quarterly reports, opinions on the effectiveness of our internal control over financial reporting, and services that generally only the
independent auditor can reasonably provide, such as comfort letters, statutory audits, consents and assistance with and review of documents filed with the Securities and Exchange Commission. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-Related Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Fees for assurance and related services that are reasonably related to the performance of the audit or
review of our consolidated financial statements and are not reported under "Audit Fees." These services include internal control reviews; attest services that are not required by statute or
regulation; employee benefit plan audits; due diligence, consultations and audits related to mergers and acquisitions; and consultations concerning financial accounting and reporting standards. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Fees for services related to tax compliance, and tax planning and advice including tax assistance with tax audits.
These services include assistance regarding federal, state and Canadian tax compliance and advice, review of tax returns, and federal, state and Canadian tax planning. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
services performed by Deloitte&nbsp;&amp; Touche&nbsp;LLP were pre-approved in accordance with the Audit Committee's pre-approval policy whereby the Audit
Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accountants. The Audit Committee will generally
pre-approve a list of specific services and categories of services, including audit, audit-related, tax and other services, for the upcoming or current fiscal year, subject to a </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>41</FONT></P>

<HR NOSHADE>
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_co17401_1_42"> </A>
<BR>

<P style="font-family:times;"><FONT SIZE=2>specified
cost level. Any service that is not included in the approved list of services must be separately pre-approved by the Audit Committee. Further approval by the Audit Committee is
also required if any previously approved service exceeds estimated or budgeted amounts by 25&nbsp;percent, or if the sum of all pre-approval services exceeds budgeted amounts by
10&nbsp;percent in the aggregate. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_audit_committee_report"> </A>
<A NAME="toc_co17401_4"> </A>
<BR></FONT><FONT SIZE=2><B>AUDIT COMMITTEE REPORT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the financial statements for the fiscal year ended December&nbsp;31, 2007, the Audit Committee has: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>reviewed
and discussed the audited financial statements with management;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>discussed
with Deloitte&nbsp;&amp; Touche&nbsp;LLP, the Company's independent registered public accounting firm (the "Auditors"), the matters required to be discussed by the statement
on Auditing Standard No.&nbsp;114, "The Auditor's Communication with those Charged with Governance" (AICPA, </FONT><FONT SIZE=2><I>Professional Standards,</I></FONT><FONT SIZE=2> Vol. 1. AU
section&nbsp;380); and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:times;"><FONT SIZE=2>received
the written disclosures and letter from the Auditors concerning the matters required by Independence Standards Board Standard No.&nbsp;1, "Independence Discussions with
Audit Committees," and has discussed with the Auditors any relationships that may impact their objectivity and independence and satisfied itself as to their independence. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
upon these reviews and discussions, the Audit Committee recommended to the Board that the Company's audited financial statements be included in the Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2007 filed with the Securities and Exchange Commission. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2>THE AUDIT COMMITTEE</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%" style="font-family:times;"><FONT SIZE=2><BR>
Thomas J. Zeller, Chairperson<BR>
John R. Howard<BR>
Warren L. Robinson<BR>
John B. Vering</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_proposal_3_shareholder_proposal"> </A>
<A NAME="toc_co17401_5"> </A>
<BR></FONT><FONT SIZE=2><B>Proposal 3    <BR>    <BR>    SHAREHOLDER PROPOSAL    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gerald R. Armstrong, the holder of approximately 724 shares of the Company's common stock, whose address is 820 Sixteenth Street, No.&nbsp;705, Denver,
Colorado, 80202-3227, has notified the Company that he intends to present the following resolution at the Annual Meeting. If properly presented, this resolution will be voted on at the
Annual Meeting. The Board of Directors and the
Company accept no responsibility for the proposed resolution and supporting statement. As required by federal regulations, the resolution and supporting statement are printed below. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2><B>SHAREHOLDER RESOLUTION:  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That the shareholders of Black Hills Corporation request its Board of Directors to take the steps necessary to eliminate classification of terms of its Board of
Directors to require that </FONT><FONT SIZE=2><I>all</I></FONT><FONT SIZE=2> Directors stand for election annually. The Board declassification shall be completed in a manner that does not affect the
unexpired terms of the previously-elected Directors. </FONT></P>

<UL>

<P style="font-family:times;"><FONT SIZE=2><B> Shareholder Supporting Statement:  </B></FONT></P>

</UL>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proponent believes that the election of directors is the strongest way that shareholders influence the directors of any corporation. Currently, our Board of
Directors is divided into three classes with each class serving three-year terms. Because of this structure, shareholders may only vote </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>42</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>for
one-third of the directors each year. This is not in the best interest of shareholders because it reduces accountability. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S.
Bancorp, Associated Banc-Corp, Piper-Jaffray Companies, Fifth-Third Bancorp, Pan Pacific Retail Properties, Qwest Communications International, Xcel Energy, Greater Bay
Bancorp, North Valley Bancorp, Pacific Continental Corporation, Regions Financial Corporation, CoBiz Financial&nbsp;Inc., Marshall&nbsp;&amp; Illsley Corporation, and Wintrust Financial,&nbsp;Inc.
are among the corporations electing directors annually because of the efforts of the proponent. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
performance of our management and our Board of Directors is now being more strongly tested due to economic conditions and the accountability for performance must be given to the
shareholders whose capital has been entrusted in the form of share investments. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
study by researchers at Harvard Business School and the University of Pennsylvania's Wharton School titled "Corporation Governance and Equity Prices" (Quarterly Journal of Economics,
February 2003), looked at the relationship between corporate governance practices (including classified boards)
and firm performance. The study found a significant positive link between governance practices favoring shareholders (such as annual directors election) and firm value. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
management may argue that directors need and deserve continuity, management should become aware that continuity and tenure may be best assured when their performance as directors
is exemplary and is deemed beneficial to the best interests of the corporation and its shareholders. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proponent regards as unfounded the concern expressed by some that annual election of all directors could leave companies without experienced directors in the event that all
incumbents are voted out by shareholders. In the unlikely event that shareholders do vote to replace all directors, such a decision would express dissatisfaction with the incumbent directors and
reflect a need for change. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you agree that shareholders may benefit from greater accountability afforded by annual election of </FONT><FONT SIZE=2><I>all</I></FONT><FONT SIZE=2> directors, please vote "FOR"
this proposal. </FONT></P>


<P style="font-family:times;"><FONT SIZE=2><B>BOARD OF DIRECTORS' STATEMENT IN OPPOSITION:  </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In response to the shareholder proposal, the Board of Directors performed a thorough review of our company's classified board structure. The matter was considered
by our Governance Committee and the Board of Directors. Our review included consideration of the reasons why companies choose to classify their boards, such as the need for continuity and protection
against coercive takeover tactics. It also included consideration of the provisions of our Articles of Incorporation and Bylaws, and in particular, the existing cumulative voting provisions. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
thorough consideration of the classified board issue, the Board of Directors ultimately determined that it is in the best interest of the shareholders to retain the classified
board. We agree that corporate governance measures have a bearing upon company performance and accountability to shareholders. We do not agree that the efficacy of governance factors, however, should
be viewed in isolation. Rather, it is the entire complex of corporate governance measures implemented by a specific company that should guide the evaluation of shareholder value and accountability.
This is the approach applied by institutional shareholder organizations that publish annual corporate governance ratings. According to these measures, even with a classified Board of Directors, Black
Hills Corporation has garnered corporate governance ratings that consistently outperform utility companies and companies in the S&amp;P&nbsp;400 Index. As reflected in our rating, our Board has in place
governance guidelines that enhance corporate accountability, such as measures to assure that the Board is composed of a majority of independent directors, and that only independent directors are
members of its committees. The Board believes that a director's contributions are best measured over several years, versus the short-term evaluation implicit in annual elections. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>43</FONT></P>

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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moreover,
Black Hills Corporation does not have a poison pill in place to deter hostile takeover attempts. The classified board structure, therefore, provides important protection for
directors against pressure from special interest groups who might have an agenda contrary to the long-term interests of all our shareholders. We feel that </FONT> <FONT SIZE=2><I>all</I></FONT><FONT SIZE=2> directors must be concerned about the
interests of </FONT><FONT SIZE=2><I>all</I></FONT><FONT SIZE=2> of the shareholders, as opposed to the issues
asserted by a special interest constituency. The classified board structure enhances the Board's ability to negotiate with a suitor to obtain the best result for shareholders in a takeover event, and
thus gives us the leverage required to best fulfill our fiduciary responsibilities in responding to a possible takeover. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors also believes that it is essential, in reviewing the classified board structure, to take into account the cumulative voting provisions in our Articles of
Incorporation and the impact of those provisions with or without classification of the Board. Our Articles of Incorporation provide for cumulative voting which, when coupled with an annual election of
directors, would substantially multiply the ability of a shareholder with short-term objectives to elect a member or members of the Board. Notably, most of the companies which have
eliminated classified board structures do not have cumulative voting. Because a classified board can make it more difficult for third parties with short-term objectives to seize control of
the Company in a single proxy contest, the classified board system provides the leverage needed under coercive conditions to negotiate terms that will maximize the value of the Company for all
shareholders. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally,
although this proposal disputes the value of director continuity, we feel that there simply is no substitute for the classified board structure in providing experience and
perspective to facilitate long-term planning, and to maximize the value of the Company for our long-term investors. Our classified Board assures that a majority of directors at
any time will have the prior experience and knowledge to oversee our complex business, with two classes of directors always having served for one or more years. Although we believe board continuity is
important, our use of a classified board has not enabled directors to become "entrenched," or unresponsive to shareholders. Even with a classified structure, our shareholders have had the opportunity
to elect 12 new directors in the last 10&nbsp;years, who have applied new perspectives and experience to our implementation of a long-term strategy. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board endeavors always to act in a manner that reflects its judgment of the best interests of the Company and its shareholders and does not believe that the classified board
structure undermines or affects in any way the accountability of the Board. All directors are required to uphold their fiduciary duties to our Company and its shareholders regardless of their term of
office. A classified board permits shareholders to annually change one-third of the directors and thereby substantially change the Board's composition and character. Corporate
accountability, in our view, is best served by the selection of responsible and experienced individuals, and not by potentially limiting director terms to one year instead of three. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors of Black Hills Corporation is committed to excellence in corporate governance and enhancement of shareholder value. We believe that our existing record
demonstrates that we will use the classified board for its intended purpose, which is to enable us to best fulfill our fiduciary responsibilities to the shareholders. At the 1986 Annual Meeting, a
substantial majority of our shareholders (79&nbsp;percent of shareholders voting) voted to approve the Board's recommendation to adopt a classified Board. The Board continues to believe that the
present system of electing one-third of the Board each year offers important advantages to our shareholders, is in the best interests of the Company and should not be changed. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><B>The Board of Directors Recommends That You<BR>
Vote "Against" the Shareholder Proposal Relating to Declassification of the Board of Directors</B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>44</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_transaction_of_other_business"> </A>
<A NAME="toc_co17401_6"> </A>
<BR></FONT><FONT SIZE=2><B>TRANSACTION OF OTHER BUSINESS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Board of Directors does not intend to present any business for action by our 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 our Board of Directors. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_shareholder_proposals_for_2009_annual_meeting"> </A>
<A NAME="toc_co17401_7"> </A>
<BR></FONT><FONT SIZE=2><B>SHAREHOLDER PROPOSALS FOR 2009 ANNUAL MEETING    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder proposals intended to be presented at our 2009 annual meeting of shareholders and considered for inclusion in our proxy materials must be received by
our Corporate Secretary in writing at our executive offices at 625 Ninth Street, P.O.&nbsp;Box&nbsp;1400, Rapid City, South Dakota 57709, prior to December&nbsp;10, 2008. Any proposal submitted
must be in compliance with Rule&nbsp;14a-8 of Regulation&nbsp;14A of the Securities and Exchange Commission. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a shareholder, who intends to present a proposal at our 2009 annual meeting of shareholders and has not sought inclusion of the proposal in our proxy materials pursuant to
Rule&nbsp;14a-8, fails to provide us with notice of such proposal by February&nbsp;22, 2009, then the persons named in the proxies solicited by our Board of Directors for our 2009
annual meeting of shareholders may exercise discretionary voting power with respect to such proposal. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="co17401_shared_address_shareholders"> </A>
<A NAME="toc_co17401_8"> </A>
<BR></FONT><FONT SIZE=2><B>SHARED ADDRESS SHAREHOLDERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with a notice sent to eligible shareholders who share a single address, we are sending only one annual report and proxy statement to that address
unless we receive instructions to the contrary from any shareholder at that address. This practice, known as "householding," is designed to reduce our printing and postage costs. However, if a
shareholder of record residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or she may contact Shareholder Relations at the below address.
Eligible shareholders of record receiving multiple copies of our annual report and proxy statement can request householding by contacting us in the same manner. Shareholders who own shares through a
bank, broker or other nominee can request householding by contacting the nominee. </FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby undertake to deliver promptly, upon written or oral request, a separate copy of the annual report to shareholders, or proxy statement, as applicable, to our shareholders at a
shared address to which a single copy of the document was delivered. </FONT></P>

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<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%" style="font-family:times;"><FONT SIZE=2>Shareholder Relations<BR>
Black&nbsp;Hills&nbsp;Corporation<BR>
P.O.&nbsp;Box&nbsp;1400<BR>
Rapid City, SD 57709<BR>
(605)&nbsp;721-1700</FONT></TD>
<TD WIDTH="3%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="36%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please
vote your shares by telephone, by the Internet or by promptly returning the accompanying form of proxy, whether or not you expect to be present at the meeting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>45</FONT></P>

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 </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cq17401_annual_report_on_form_10-k"> </A>
<A NAME="toc_cq17401_1"> </A>
<BR></FONT><FONT SIZE=2><B>ANNUAL REPORT ON FORM 10-K    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>A copy of our Annual Report on Form&nbsp;10-K (excluding exhibits), for the year ended December&nbsp;31, 2007, which is
required to be filed with the Securities and Exchange Commission, will be made available to shareholders to whom this Proxy Statement is mailed, without charge, upon written or oral request to
Shareholder Relations, Black Hills Corporation, P.O.&nbsp;Box&nbsp;1400, Rapid City, SD 57709, Telephone Number: (605)&nbsp;721-1700. Our Annual Report on
Form&nbsp;10-K also may be accessed through our website at </B></FONT><FONT SIZE=2><B><I>www.blackhillscorp.com.</I></B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2><A
NAME="cq17401_important_notice_regarding_the__imp04326"> </A>
<A NAME="toc_cq17401_2"> </A>
<BR></FONT><FONT SIZE=2><B>IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS<BR>  FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 20, 2008    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>Shareholders may view this proxy statement, our form of proxy and our 2007 Annual Report to Shareholders over the Internet by accessing
our website at </B></FONT><FONT SIZE=2><B><I>www.blackhillscorp.com</I></B></FONT><FONT SIZE=2><B>. Information on our website does not constitute a part of this proxy statement.</B></FONT></P>

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<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>By Order of the Board of Directors,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>
<IMG SRC="g219381.jpg" ALT="SIG" WIDTH="228" HEIGHT="42">
 </B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%" style="font-family:times;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%" style="font-family:times;"><FONT SIZE=2>ROXANN R. BASHAM<BR></FONT> <FONT SIZE=2><I>Vice President&#151;Governance and Corporate Secretary</I></FONT></TD>
</TR>
</TABLE>
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<P style="font-family:times;"><FONT SIZE=2>Dated:
April&nbsp;8, 2008 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT SIZE=2>46</FONT></P>

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<div style="font-family:Times New Roman;">

<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">BLACK HILLS
CORPORATION</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ANNUAL MEETING OF
SHAREHOLDERS</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tuesday, May 20,
2008</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9:30 a.m., Local
Time</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Journey Museum</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">222 New York
Street</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rapid City,
SD&#160; 57701</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="73%" valign="top" style="padding:0in 0in 0in 0in;width:73.24%;">
  <h3 align="left" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:0pt;">Black Hills
  Corporation</font></b></h3>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <h3 align="left" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;letter-spacing:0pt;">&nbsp;</font></b></h3>
  </td>
  <td width="18%" valign="top" style="padding:0in 0in 0in 0in;width:18.74%;">
  <h3 align="left" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;letter-spacing:0pt;">&nbsp;</font></b></h3>
  </td>
 </tr>
 <tr>
  <td width="73%" valign="top" style="padding:0in 0in 0in 0in;width:73.24%;">
  <h3 align="left" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:0pt;">P.O. Box
  1400, Rapid City, SD 57709</font></b></h3>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <h3 align="left" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;letter-spacing:0pt;">&nbsp;</font></b></h3>
  </td>
  <td width="18%" valign="top" style="padding:0in 0in 0in 0in;width:18.74%;">
  <h3 align="center" style="font-weight:bold;letter-spacing:-.1pt;margin:0in 0in .0001pt;page-break-after:auto;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:0pt;">PROXY</font></b></h3>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">This proxy is solicited by the
Board of Directors for use at the Annual Meeting on May 20, 2008.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned hereby appoints David R. Emery and Steven J. Helmers,
and each of them, with full power of substitution, to vote all shares of the
undersigned at the Annual Meeting of Shareholders to be held at 9:30 a.m.,
local time, May 20, 2008, at The Journey Museum, 222 New York Street, Rapid
City, SD&#160; 57701, and at any adjournment
thereof, upon all subjects that may properly come before the meeting, including
the matters described in the Proxy Statement furnished herewith.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Your vote is important!&#160; Ensure that your shares are represented at
the meeting. </font></b>Either (1) submit your proxy by touchtone
telephone, (2) submit your proxy by Internet, or (3) mark, date, sign, and
return this proxy in the envelope provided. <b>If no
directions are given, the proxies will vote in accordance with the Board of
Directors recommendation on all matters listed on this proxy, and at their
discretion on any other matters that may properly come before the meeting.</b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">See reverse for voting
instructions.</font></i></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<br clear="all" style="page-break-before:always;">


<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="50%" valign="top" style="padding:0in 0in 0in 0in;width:50.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25%" valign="top" style="padding:0in 0in 0in 0in;width:25.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="25%" valign="top" style="padding:0in 0in 0in 0in;width:25.0%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">COMPANY #</font></b></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">There are three ways to vote your Proxy.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Your telephone or Internet vote authorizes the named Proxies to vote
your shares in the same manner as if you marked, signed and returned your proxy
card.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">VOTE BY PHONE&#151;TOLL FREE&#151;1-800-560-1965&#151;QUICK***EASY***IMMEDIATE</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Use any
touchtone telephone to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. (CT) on Monday, May 19, 2008.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Please have your
proxy card and the last four digits of your Social Security Number or Tax
Identification Number available. Follow the simple instructions the voice
provides you.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">VOTE BY INTERNET&#151;http://www.eproxy.com/bkh/&#151;QUICK***EASY***IMMEDIATE</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Use the Internet
to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on Monday,
May 19, 2008.</p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="3" face="Times New Roman" style="font-size:12.0pt;">&#149;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Please have your
proxy card and the last four digits of your Social Security Number or Tax
Identification Number available. Follow the simple instructions to obtain your
records and create an electronic ballot.</p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">VOTE BY MAIL</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mark, sign and date your proxy card and return it in the postage-paid
envelope we&#146;ve provided or return it to Black Hills Corporation, c/o Shareowner
Services, P.O. Box 64873, St. Paul, MN&#160;
55164-0873.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">If you vote by Phone or Internet,
please do not mail your Proxy Card.</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">The Board
of Directors Recommends a Vote FOR Items 1 and 2 and a Vote AGAINST Item 3.</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="24%" valign="top" style="padding:0in 0in 0in 0in;width:24.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Election of Directors:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.08%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">01</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">David R. Emery</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.62%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vote FOR&nbsp;&nbsp;&nbsp;</font><font face="Wingdings">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.24%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="19%" valign="top" style="padding:0in 0in 0in 0in;width:19.94%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vote WITHHELD&nbsp;&nbsp;</font><font face="Wingdings">o</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="24%" valign="top" style="padding:0in 0in 0in 0in;width:24.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.08%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">02</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kay S. Jorgensen</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">all
  nominees</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.24%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="19%" valign="top" style="padding:0in 0in 0in 0in;width:19.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">from
  all nominees</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="24%" valign="top" style="padding:0in 0in 0in 0in;width:24.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.08%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">03</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Warren L. Robinson</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(except as marked)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.24%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="19%" valign="top" style="padding:0in 0in 0in 0in;width:19.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.5%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="24%" valign="top" style="padding:0in 0in 0in 0in;width:24.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.08%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.14%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">04</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.1%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="22%" valign="top" style="padding:0in 0in 0in 0in;width:22.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John B. Vering</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.78%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="top" style="padding:0in 0in 0in 0in;width:17.62%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.24%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="19%" valign="top" style="padding:0in 0in 0in 0in;width:19.94%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="58%" valign="top" style="padding:0in 0in 0in 0in;width:58.18%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Instructions: To <b>cumulate</b> votes for any indicated nominee, write</font></p>
  </td>
  <td width="41%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:41.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="58%" valign="top" style="padding:0in 0in 0in 0in;width:58.18%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the number of the
  nominee and the number of shares for such<br>
  nominee in the box provided to the right.)</font></p>
  </td>
  <td width="41%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:41.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Board of Directors
recommends a vote <u>FOR</u> the following proposal.</font></p>

<p align="center" style="margin:0in 0in .0001pt 1.0in;text-align:center;text-indent:-1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="90%" style="border-collapse:collapse;width:90.0%;">
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Against</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Abstain</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ratify
  the appointment of Deloitte &amp; Touche LLP to serve as Black Hills
  Corporation&#146;s independent registered public accounting firm for 2008.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="70%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:70.4%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Board of Directors recommends a vote <u>AGAINST</u>
  the following proposal.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Against</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Abstain</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.06%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.38%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.96%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Shareholder
  proposal requesting necessary steps to cause annual election of directors.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0in 0in 0in 0in;width:6.4%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0in 0in 0in 0in;width:8.8%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
  <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0in 0in 0in 0in;width:8.42%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED <u>FOR</u> ITEMS 1 AND 2
and <u>AGAINST</u> ITEM 3.</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="24%" valign="top" style="padding:0in 0in 0in 0in;width:24.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Address change? Mark Box</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in 0in 0in 0in;width:26.9%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:51.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate changes below:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.26%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;Date</font></b></p>
  </td>
  <td width="31%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:31.42%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:9.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:51.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:51.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:37.76%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.9%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="51%" colspan="2" rowspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:51.32%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Signature(s) Box</font></p>
  </td>
 </tr>
 <tr>
  <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Please sign exactly as your name(s) appear on Proxy.
  If held in joint tenancy, all persons must sign. Trustees, administrators,
  etc., should include title and authority. Corporations should provide full
  name of corporation and title of authorized officer signing the proxy.</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="183" style="border:none;"></td>
  <td width="201" style="border:none;"></td>
  <td width="15" style="border:none;"></td>
  <td width="39" style="border:none;"></td>
  <td width="235" style="border:none;"></td>
  <td width="8" style="border:none;"></td>
  <td width="67" style="border:none;"></td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt 3.5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
<!-- ZEQ.=1,SEQ=53,EFW="2184298",CP="BLACK HILLS CORPORATION",DN="1",CHK=692593,FOLIO='',FILE="DISK124:[08ZAW2.08ZAW17402]7674-2-BE_ZAW17402.CHC",USER="DHOLBRO",CD='Apr  2 00:08 2008' -->


<BR>
<P><br><A NAME="08ZAW17401_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bc17401_1">Notice of 2008 Annual Meeting of Shareholders and Proxy Statement</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be17401_1">BLACK HILLS CORPORATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be17401_2">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS MAY 20, 2008</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be17401_3">BLACK HILLS CORPORATION</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be17401_4">PROXY STATEMENT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_be17401_5">VOTING RIGHTS AND PRINCIPAL HOLDERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_bg17401_1">TABLE OF CONTENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ca17401_1">COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_1">Proposal 1 ELECTION OF DIRECTORS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_2">The Board of Directors recommends a vote FOR the election of the following nominees: Nominees for Election Until 2011 Annual Meeting&#151;Class II</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_3">Directors Whose Terms Expire at 2009 Annual Meeting&#151;Class III</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_4">Directors Whose Terms Expire at 2010 Annual Meeting&#151;Class I</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_5">CORPORATE GOVERNANCE</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cc17401_6">MEETINGS AND COMMITTEES OF THE BOARD</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ce17401_1">EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cg17401_1">COMPENSATION COMMITTEE REPORT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cg17401_2">SUMMARY COMPENSATION TABLE</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ci17401_1">GRANTS OF PLAN BASED AWARDS IN 2007(1)</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ci17401_2">OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2007</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ci17401_3">OPTION EXERCISES AND STOCK VESTED DURING 2007</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_ck17401_1">PENSION BENEFITS FOR 2007</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cm17401_1">NONQUALIFIED DEFERRED COMPENSATION FOR 2007</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cm17401_2">POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cm17401_3">SEVERANCE AGREEMENT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cm17401_4">DIRECTOR COMPENSATION</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_1">SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_2">Proposal 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_3">FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_4">AUDIT COMMITTEE REPORT</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_5">Proposal 3 SHAREHOLDER PROPOSAL</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_6">TRANSACTION OF OTHER BUSINESS</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_7">SHAREHOLDER PROPOSALS FOR 2009 ANNUAL MEETING</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_co17401_8">SHARED ADDRESS SHAREHOLDERS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cq17401_1">ANNUAL REPORT ON FORM 10-K</A></FONT><BR>
<FONT SIZE=2 style="font-family:times;"><A HREF="#toc_cq17401_2">IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 20, 2008</A></FONT><BR>

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