Exhibit 99
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 1998
Commission File Number 1-7978
BLACK HILLS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
BLACK HILLS CORPORATION
625 NINTH STREET
PO BOX 1400
RAPID CITY, SOUTH DAKOTA 57709
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BLACK HILLS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Stock Purchase Plan
Committee of the Black Hills Corporation
Employee Stock Purchase Plan:
We have audited the accompanying statements of financial position of the Black
Hills Corporation Employee Stock Purchase Plan (the Plan) as of December 31,
1998 and 1997, and the related statements of income and changes in participants'
equity for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Employee Stock Purchase Plan
Committee and the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Plan as of December 31,
1998 and 1997, and the income and changes in participants' equity for each of
the three years in the period ended December 31, 1998, in conformity with
generally accepted accounting principles.
Minneapolis, Minnesota Arthur Andersen LLP
January 27, 1999
Black Hills Corporation
Employee Stock Purchase Plan
Statements of Financial Position
December 31
1998 1997
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Assets
Cash $95,392 $43,582
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Liabilities and Participants' Equity
Participants' Equity $95,392 $43,582
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The accompanying note is an integral part of these statements.
Black Hills Corporation
Employee Stock Purchase Plan
Statements of Income and Changes in Participants' Equity
For the years December 31
1998 1997 1996
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Participants' Equity, Beginning of Year $ 43,582 $ 81,332 $115,820
Increases (Decreases) During the Year:
Employee Contributions Received 269,719 359,188 462,870
Dividend Income 5,314 11,804 14,094
Distributions to Participants (223,223) (408,742) (511,452)
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Participants' Equity, End of Year $ 95,392 $ 43,582 $ 81,332
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The accompanying note is an integral part of these statements.
Note to Financial Statements
(1) Plan Description
General - The Black Hills Corporation Employee Stock Purchase Plan was
adopted by the Company's Board of Directors on January 29, 1987, and
approved by the Company's stockholders on May 20, 1987, at which time
100,000 shares of the Company's Common Stock were reserved for offering
under this Plan. At the May 23, 1995 Annual Meeting of Shareholders, the
Company's stockholders approved an additional 200,000 shares of the
Company's Common Stock, for issuance under this Plan. As of December 31,
1998, 267,135 shares were available for issuance under the Plan.
The Board of Directors of the Company determine the "Offering Date" on
which shares of stock may be offered. Offerings under the Plan may be made
at such times, for such number of shares and remain open for such periods
(up to 90 days) as the Company's Board of Directors may prescribe.
Subscriptions can only be accepted during the prescribed period. The
subscription price per share is equal to 90 percent of the fair market
value of the Common Stock on the offering date and is set forth in the
Subscription Agreement.
Administration - The Plan is administered by the Board of Directors of the
Company who have the power and authority to promulgate such rules and
regulations as they deem appropriate for the administration of the Plan,
to interpret its provisions and to take all actions in connection
therewith as they deem necessary or advisable. Other aspects of
administration are handled by the Employee Stock Purchase Plan Committee,
the members of which are designated from time to time by the Chief
Executive Officer of the Company. The Company pays all administrative
costs of the Plan.
Eligibility - Each full-time employee of the Company or its subsidiaries,
including officers, but excluding directors who are not employees of the
Company or subsidiaries, is eligible to participate in the Plan. A
full-time employee is one who is in the active service of the Company or
its subsidiaries on the date an offering is made. Any employee whose
customary employment is twenty hours or less per week or whose customary
employment is for not more than five months per calendar year is not
eligible to participate.
No employee is allowed to participate in the Plan if such employee,
immediately after the offering is granted, owns stock possessing 5 percent
or more of the total combined voting power or value of all classes of
stock of the Company.
Contributions - The plan is solely funded by employee contributions. An
eligible employee may subscribe for not less than 20 nor more than 400
shares of Common Stock in connection with each offering. A subscription
must be accompanied by an initial payment of $1.00 for each share of stock
for which a subscription is made. The remaining balance will be paid
through equal payroll deductions during the 12 month period following the
Subscription Date.
Investment of Funds; Issuance of Shares - Amounts paid by employees on
Employee Stock Purchase Plan subscriptions through payroll deductions are
applied solely to purchase shares of Common Stock allotted to them,
pursuant to the Plan.
Except in the event of withdrawal or cancellation, certificates for shares
subscribed to pursuant to an offering are not issued to an employee until
all shares have been paid for in full.
Dividends - Dividends are applied toward the purchase of additional shares
of common stock of the Company through the Dividend Reinvestment and Stock
Purchase Plan at the offering price.
Withdrawal From the Plan or Cancellation of Subscription - Shares are
distributed to employees after the subscription is paid for in full.
An employee participating in the Plan has the right, any time prior to
payment in full, to cancel a subscription for unpaid shares by giving the
committee written notice to that effect. Upon payment in full of the
subscription or upon withdrawal from the Plan or termination of
employment, the participant's account will be cleared by one of the
following methods pursuant to the participants request; (a) Shares
transferred to employee's "of record" account; (b) Certificate issued for
whole shares and a check for fractional shares; or (c) Shares sold on the
open market.
Termination of employment for any reason including retirement or death,
accompanied by failure of the terminated employee or the legal
representative of the descendent to pay the entire balance due for the
purchase of the shares for which a subscription has been accepted will
result in cancellation. Such election shall be made within ten days of the
time of termination of employment, except for death which shall be within
two months following death.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Stock Purchase Plan Committee has duly caused this Annual Report to be
signed on its behalf by the undersigned hereunto duly authorized.
Black Hills Corporation
Employee Stock Purchase Plan
Date: March 9, 1999 By /s/ Roxann R. Basham
Roxann R. Basham
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated January 27, 1999, included in this Form 11-K, into the Company's
previously filed Registration Statement (Form S-8 No. 33-63059).
/s/ ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
March 9, 1999