Omnibus Incentive Compensation Plan
Black Hills Corporation
Effective May 30, 2001
TABLE OF CONTENTS
Page
Article 1. Establishment, Objectives, and Duration.........................................................1
1.1 Establishment of the Plan.......................................................................1
1.2 Objectives of the Plan..........................................................................1
1.3 Duration of the Plan............................................................................1
Article 2. Definitions.....................................................................................1
Article 3. Administration..................................................................................6
3.1 General.........................................................................................6
3.2 Authority of the Committee......................................................................7
3.3 Decisions Binding...............................................................................7
Article 4. Shares Subject to the Plan and Maximum Awards...................................................7
4.1 Number of Shares Available for Grants...........................................................7
4.2 Lapsed Awards and Awards Not Paid in Shares.....................................................8
4.3 Adjustments in Authorized Shares................................................................8
Article 5. Eligibility and Participation...................................................................8
5.1 Eligibility.....................................................................................8
5.2 Actual Participation............................................................................8
Article 6. Stock Options...................................................................................8
6.1 Grant of Options................................................................................8
6.2 Award Agreement.................................................................................9
6.3 Option Price....................................................................................9
6.4 Duration of Options.............................................................................9
6.5 Exercise of Options.............................................................................9
6.6 Payment.........................................................................................9
6.7 Restrictions on Share Transferability...........................................................9
6.8 Termination of Employment/Directorship.........................................................10
6.9 Nontransferability of Options..................................................................10
6.10 No Cancellation and Reissuance of Options......................................................10
Article 7. Stock Appreciation Rights......................................................................10
7.1 Grant of SARs..................................................................................10
7.2 SAR Agreement..................................................................................11
7.3 Term of SARs...................................................................................11
7.4 Exercise of Freestanding SARs..................................................................11
7.5 Exercise of Tandem SARs........................................................................11
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7.6 Payment of SAR Amount..........................................................................11
7.7 Termination of Employment/Directorship.........................................................11
7.8 Nontransferability of SARs.....................................................................12
Article 8. Restricted Stock..............................................................................12
8.1 Grant of Restricted Stock......................................................................12
8.2 Restricted Stock Agreement.....................................................................12
8.3 Transferability................................................................................12
8.4 Other Restrictions.............................................................................12
8.5 Voting Rights..................................................................................13
8.6 Dividends and Other Distributions..............................................................13
8.7 Termination of Employment/Directorship.........................................................13
Article 9. Performance Units, Performance Shares, and Cash-Based Awards...................................13
9.1 Grant of Performance Units/Shares and Cash-Based Awards........................................13
9.2 Value of Performance Units/Shares and Cash-Based Awards........................................13
9.3 Earning of Performance Units/Shares and Cash-Based Awards......................................13
9.4 Form and Timing of Payment of Performance Units/Shares and Cash-Based Awards...................14
9.5 Termination of Employment/Directorship........................................................14
9.6 Nontransferability.............................................................................14
Article 10. Other Awards...................................................................................14
Article 11. Performance Measures...........................................................................14
Article 12. Beneficiary Designation........................................................................16
Article 13. Deferrals......................................................................................16
Article 14. Rights of Employees/Directors..................................................................16
14.1 Employment.....................................................................................16
14.2 Participation..................................................................................16
14.3 Rights as a Stockholder........................................................................16
Article 15. Change in Control..............................................................................16
15.1 Treatment of Outstanding Awards................................................................16
15.2 Termination, Amendment, and Modifications of Change-in-Control Provisions......................17
14.3 Pooling of Interests Accounting................................................................17
Article 16. Amendment, Modification, Termination and Bifurcation ..........................................18
16.1 Amendment, Modification, and Termination.......................................................18
16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events.............18
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16.3 Awards Previously Granted......................................................................18
16.4 Compliance with Code Section 162(m)............................................................18
16.5 Bifurcation of the Plan........................................................................18
Article 17. Withholding....................................................................................18
17.1 Tax Withholding................................................................................19
17.2 Share Withholding..............................................................................19
Article 18. Indemnification................................................................................19
Article 19. Successors....................................................................................19
Article 20. General Provisions.............................................................................19
20.1 Gender and Number..............................................................................19
20.2 Severability...................................................................................20
20.3 Requirements of Law............................................................................20
20.4 Securities Law Compliance......................................................................20
20.5 Listing........................................................................................20
20.6 Delivery of Title..............................................................................20
20.7 Investment Representations.....................................................................20
20.8 No Additional Rights...........................................................................20
20.9 Uncertificated Shares..........................................................................21
20.10 Unfunded Status of the Plan....................................................................21
20.11 Governing Law..................................................................................21
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Black Hills Corporation
Omnibus Incentive Compensation Plan
Article 1. Establishment, Objectives, and Duration
1.1 Establishment of the Plan. Black Hills Corporation, a South Dakota
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "Black Hills Corporation Omnibus
Incentive Compensation Plan" (hereinafter referred to as the "Plan"), as set
forth in this document. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units, and Cash-Based Awards.
The Plan shall become effective when approved by the Shareholders at
the 2001 annual meeting of Shareholders on May 30, 2001, (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.
1.2 Objectives of the Plan. The objectives of the Plan are to optimize
the profitability and growth of the Company through annual and long-term
incentives that are consistent with the Company's goals and that link the
personal interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual performance;
and to promote teamwork among Participants. The Plan is further intended to
provide flexibility to the Company, its Affiliates, and Subsidiaries, in their
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in such success.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 16 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after the tenth (10th ) anniversary
of the Effective Date.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1 "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations of the Exchange Act.
2.2 "Award" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, Performance Units, or Cash-Based
Awards.
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2.3 "Award Agreement" means an agreement entered into by the Company
and each Participant setting forth the terms and provisions applicable to Awards
granted under this Plan.
2.4 "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule l3d-3 of the General Rules and Regulations under
the Exchange Act.
2.5 "Board" or "Board of Directors" means the Board of Directors
of the Company.
2.6 "Cash-Based Award" means an Award granted to a Participant as
described in Article 9 herein.
2.7 "Change in Control" shall mean any of the following events:
(a) An acquisition (other than directly from the Company)
of any Common Stock of the Company by any "Person" (as
the term person is used for purposes of Section 13(d)
or 14(d) of the Exchange Act, as amended (the "Exchange
Act"), immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of thirty
percent (30%) or more of the Common Stock of the
Company; provided, however, in determining whether a
Change in Control has occurred, Common Stock which is
acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (1) an
employee benefit plan (or a trust forming a part
thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its
voting power or its voting equity securities ("Voting
Securities") or equity interest is owned, directly or
indirectly, by the Company (for purposes of this
definition, a "Subsidiary"), (ii) the Company or its
Subsidiaries, or (iii) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of the Effective Date are
members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the
members of the Board; provided, however, that if the
election, or nomination for election by the Company's
common shareholders, of any new director was approved
by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this
Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be
considered a member of the Incumbent Board if such
individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened
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solicitation of proxies or consents by or on behalf of
a Person other than the Board (a "Proxy Contest")
including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or
(c) Approval by shareholders of the Company of:
(i)......A merger, consolidation or reorganization
involving the Company, unless such merger,
consolidation or reorganization is a
"Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger,
consolidation or reorganization of the
Company where:
(A) The shareholders of the Company,
immediately before such merger,
consolidation or reorganization, own
directly or indirectly immediately
following such merger, consolidation
or reorganization, at least seventy
percent (70%) of the combined voting
power of the outstanding Voting
Securities of the corporation
resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in
substantially the same proportion as
their ownership of the Voting
Securities immediately before such
merger, consolidation or
reorganization,
(B) The individuals who were members of
the Incumbent Board immediately
prior to the execution of the
agreement providing for such merger,
consolidation or reorganization
constitute at least two-thirds of
the members of the board of
directors of the Surviving
Corporation, or a corporation
beneficially directly or indirectly
owning a majority of the Voting
Securities of the Surviving
Corporation, and
(C) No Person other than (i) the
Company, (ii) any Subsidiary, (iii)
any employee benefit plan (or any
trust forming a part thereof)
maintained by the Company, the
Surviving Corporation, or any
Subsidiary, or (iv) any Person who,
immediately prior to such merger,
consolidation or reorganization had
Beneficial Ownership of thirty
percent (30%) or more of the then
outstanding Voting Securities), has
Beneficial Ownership of thirty
percent (30%) or more of the
combined voting power of the
Surviving Corporation's then
outstanding Voting Securities.
(ii) A complete liquidation or dissolution of
the Company; or
(iii) An agreement for the sale or other
disposition of all or substantially all of
the assets of the Company to any Person
other
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than (x) a transfer to a Subsidiary or
(y) a sale or transfer of a Subsidiary by
the Company except if such sale or transfer
would be a sale or other disposition of all
or substantially all of the assets of the
Company.
(d) Notwithstanding the foregoing, (i) a Change in Control
shall not be deemed to occur solely because any person
(the "Subject Person") acquired Beneficial Ownership of
more than the permitted amount of the then outstanding
Common Stock as a result of the acquisition of Common
Stock by the Company which, by reducing the number of
shares of Common Stock then outstanding, increases the
proportional number of shares Beneficially Owned by the
Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as
a result of the acquisition of Common Stock by the
Company, and after such stock acquisition by the
Company, the Subject Person becomes the Beneficial
Owner of any additional Common Stock which increases
the percentage of the then outstanding Common Stock
Beneficially Owned by the Subject Person, then a Change
in Control shall occur; and (ii) a Change in Control
shall not be deemed to occur unless and until all
regulatory approvals required to effect a Change in
Control of the Company have been obtained.
2.8 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
2.9 "Committee" means the committee appointed by the Board to
administer Awards to Employees, as specified in Article 3 herein.
2.10 "Common Stock" means the $1 par value common stock of the
Company.
2.11 "Company" means Black Hills Corporation, a South Dakota
corporation and any successor thereto as provided in Article 19 herein.
2.12 "Covered Employee" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is, or, in the judgment of the
Board, might then be one of the group of "covered employees," as defined in the
regulations promulgated under Code Section 162(m), or any successor statute.
2.13 "Director" means any individual who is a member of the Board of
Directors of the Company; provided, however, that any Director who is employed
by the Company shall be considered an Employee under the Plan.
2.14 "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Committee.
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2.15 "Effective Date" shall have the meaning ascribed to such term
in Section1.1 hereof.
2.16 "Employee" means any employee of the Company or its
Subsidiaries or Affiliates.
2.17 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.18 "Fair Market Value" shall be determined on the basis of the
closing sale price on the principal securities exchange on which the Shares are
traded or, if there is no such sale on the relevant date, then on the last
previous day on which a sale was reported.
2.19 "Freestanding SAR" means an SAR that is granted independently
of any Options, as described in Article 7 herein.
2.20 "Incentive Stock Option" or "ISO" means an option to purchase
Shares granted under Article 6 herein and that is designated as an Incentive
Stock Option and that is intended to meet the requirements of Code Section 422.
2.21 "Insider" shall mean an individual who is, on the relevant date,
an officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.22 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and that is not intended to meet the
requirements of Code Section 422, or that otherwise does not meet such
requirements.
2.23 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
2.24 "Option Price" means the price at which a Share may be purchased
by a Participant pursuant to an Option.
2.25 "Other Award" means an Award granted under Article 10 hereunder.
2.26 "Participant" means an Employee or Director who has been selected
to receive an Award or who has outstanding an Award granted under the Plan.
2.27 "Performance-Based Exception" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.28 "Performance Share" means an Award granted to a Participant, as
described in Article 9 herein.
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2.29 "Performance Unit" means an Award granted to a Participant, as
described in Article 9 herein.
2.30 "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee, at its discretion), and the Shares are
subject to a substantial risk of forfeiture, as provided in Article 8 herein.
2.31 "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.32 "Restricted Stock" means an Award granted to a Participant
pursuant to Article 8 herein.
2.33 "Retirement" shall have the meaning ascribed to such term in the
Company's tax-qualified defined benefit retirement plan.
2.34 "Rule 16b-3" means Rule 16b-3 of the regulations promulgated under
Section 16 of the Exchange Act, as amended, or any successor rule in effect from
time to time.
2.35 "Shares" means the shares of Common Stock of the Company.
2.36 "Stock Appreciation Right" or "SAR" means an Award, granted alone
or in connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.
2.37 "Subsidiary" means any corporation, partnership, joint venture, or
other entity in which the Company has a majority voting interest.
2.38 "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when a
Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).
Article 3. Administration
3.1 General. Subject to the terms and conditions of the Plan, the Plan
shall be administered by the Committee. The members of the Committee shall be
appointed by the Board from the Compensation Committee of the Board, and shall
serve at the discretion of, the Board of Directors. All members of the Committee
shall meet the definition of "nonemployee directors" as defined in 17 C.F.R. ss.
240.16b-3(b)(3)(i) and "outside directors" as defined in Code regulation ss.
1.162-27(e)(3). The Committee shall have the authority to delegate
administrative duties to
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officers of the Company; provided, that no delegation may be made of all or any
part of authority under the Plan to the extent such delegation would
result in noncompliance with Rule 16b-3 or Code regulation ss. 1.162-27.
3.2 Authority of the Committee. Except as limited by law or by the
articles of incorporation or bylaws of the Company, and subject to the
provisions of the Plan herein, the Committee shall have full power to select
Employees and Directors who shall participate in the Plan; determine the sizes
and types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or waive rules and
regulations for the Plan's administration; and amend the terms and conditions of
any outstanding Award as provided in the Plan. Further, the Committee shall make
all other determinations that may be necessary or advisable for the
administration of the Plan.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Committee shall be final, conclusive, and binding on all
persons, including the Company, its stockholders, Directors, Employees,
Participants, and their estates and beneficiaries.
Article 4. Shares Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Grants. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be one million two hundred
thousand (1,200,000), no more than two hundred forty thousand (240,000) of which
may be granted in the form of Restricted Shares. Such Share may be authorized
but unissued Shares, treasury shares, shares acquired on the open market
specifically for distribution under this Plan, or any combination thereof, as
the Committee may from time to time determine. The Committee shall determine the
appropriate methodology for calculating the number of shares issued pursuant to
the Plan. Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to comply with the Performance-Based Exception,
the following rules shall apply to grants of such Awards under the Plan:
(a) Stock Options: The maximum aggregate number of Shares
that may be granted in the form of Stock Options,
pursuant to any Award granted in any one fiscal year
to any one single Participant shall be five hundred
thousand (500,000); provided, that the aggregate Fair
Market Value (determined as of the time an Incentive
Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options are
exercisable for the first time during any calendar
year shall not exceed $100,000.
(b) SARs:.... The maximum aggregate number of Shares that
may be granted in the form of Stock Appreciation
Rights, pursuant to any Award granted in any one
fiscal year to any one single Participant shall be
five hundred thousand (500,000).
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(c) Restricted Stock: The maximum aggregate grant with
respect to Awards of Restricted Stock granted in any
one fiscal year to any one Participant shall be one
hundred thousand (100,000).
(d) Performance Shares/Performance Units and Cash-Based
Awards: The maximum aggregate grant with respect to
Awards of Performance Shares made in any one fiscal
year to any one Participant shall be equal to the
value of fifty thousand (50,000) Shares; the maximum
aggregate amount awarded with respect to Cash-Based
Awards or Performance Units to any one Participant in
any one fiscal year may not exceed Two Million
Dollars ($2,000,000).
4.2 Lapsed Awards and Awards Not Paid in Shares. If any Award granted
under this Plan is canceled, terminates, expires, or lapses for any reason, any
Shares subject to such Award again shall be available for the grant of an Award
under the Plan. Shares received by the Company as payment for an Award (e.g.,
stock-for-stock exercises), Shares withheld by the Company to satisfy tax
withholding and stock-based Awards that are ultimately settled in cash shall be
available for grant of future Awards under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares that may be delivered under
Section 4.1, in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan, and in the Award limits set forth in
subsections 4.1 (a) and 4.1 (b), as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be a whole number.
Article 5. Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in this Plan
include all Employees and Directors.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Commitee may, from time to time, select from all eligible Employees and
Directors, those to whom Awards shall be granted and shall determine the nature
and amount of each Award.
Article 6. Stock Options
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6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine which are not inconsistent with the terms of the Plan.
The Award Agreement also shall specify whether the Option is intended to be an
ISO within the meaning of Code Section 422, or an NQSO whose grant is intended
not to fall under the provisions of Code Section 422.
6.3 Option Price. The Option Price for each grant of an Option under
this Plan shall be as determined by the Committee; provided, that the Option
Price may in no event be less than the Fair Market Value of the Shares subject
to the Option on the date of grant of the Option.
6.4 Duration of Options. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no ISO shall be exercisable later than the tenth (10th)
anniversary date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent; or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares that are
tendered must have been held by the Participant for at least six (6) months
prior to their tender to satisfy the Option Price); or (c) by a combination of
(a) and (b); or (d) any other method approved by the Committee in its sole
discretion.
The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
Subject to any governing rules or regulations or to the provisions of
Article 13, as soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
Unless otherwise determined by the Committee, all payments under all of
the methods indicated above shall be paid in United States dollars.
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6.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities or tax laws, under
the requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 Termination of Employment/Directorship. Each Participant's Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment or directorship with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.
6.9 Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the
Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution.
Further, all ISOs granted to a Participant under the
Plan shall be exercisable during his or her lifetime
only by such Participant.
(b) Nonqualified Stock Options. Except as otherwise
provided in a Participant's Award Agreement, no NQSO
granted under this Article 6 may be sold,
transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by
the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award
Agreement, all NQSOs granted to a Participant under
this Article 6 shall be exercisable during his or her
lifetime only by such Participant.
6.10 No Cancellation and Reissuance of Options. In no event shall
the Board or the Committee permit the repricing of Options by any method,
including by cancellation and reissuance.
Article 7. Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SAR.
Subject to the terms and conditions of the Plan, the Committee shall
have complete discretion in determining the number of SARs granted to each
Participant and, consistent with
10
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market Value
of a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.
7.2 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.3 Term of SARs. The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion.
7.4 Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.
7.5 Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (b) the value of
the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (c) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a
Share on the date of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, in some combination thereof, or in
any other manner approved by the Committee at its sole discretion. The
Committee's determination regarding the form of SAR payout shall be set forth in
the Award Agreement pertaining to the grant of the SAR.
7.7 Termination of Employment/Directorship. Each Award Agreement shall
set forth the extent to which the Participant shall have the right to exercise
the SAR following termination of the Participant's employment or directorship
with the Company, its Affiliates,
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and/or its subsidiaries, as the case may be. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be uniform among all SARs
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for termination.
7.8 Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
Article 8. Restricted Stock
8.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
8.3 Transferability. Except as provided in this Article 8, the Shares
of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.
8.4 Other Restrictions. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock granted
pursuant to the Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock, restrictions based upon the achievement of specific
performance goals, time-based restrictions on vesting following the attainment
of the performance goals, time-based restrictions, and/or restrictions under
applicable federal or state securities laws.
To the extent deemed appropriate by the Committee, the Company may
retain the certificates representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the
Participant after the last day of the applicable Period of Restriction.
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8.5 Voting Rights. If the Committee so determines, Participants holding
Shares of Restricted Stock granted hereunder may be granted the right to
exercise full voting rights with respect to those Shares during the Period of
Restriction.
8.6 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
may, if the Committee so determines, be credited with dividends paid with
respect to the underlying Shares while they are so held. The Committee may apply
any restrictions to the dividends that the Committee deems appropriate. Without
limiting the generality of the preceding sentence, if the grant or vesting of
Restricted Shares granted to a Covered Employee is designed to comply with the
requirements of the Performance-Based Exception, the Committee may apply any
restrictions it deems appropriate to the payment of dividends declared with
respect to such Restricted Shares, such that the dividends and/or the Restricted
Shares maintain eligibility for the Performance-Based Exception.
8.7 Termination of Employment/Directorship. Each Award Agreement shall
set forth the extent to which the Participant shall have the right to receive
unvested Restricted Shares following termination of the Participant's employment
or directorship with the Company. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan, and may reflect distinctions based
on the reasons for termination.
Article 9. Performance Units, Performance Shares, and Cash-Based
Awards
9.1 Grant of Performance Units/Shares and Cash-Based Awards. Subject to
the terms of the Plan, Performance Units, Performance Shares, and/or Cash-Based
Awards may be granted to Participants in such amounts and upon such terms, and
at any time and from time to time, as shall be determined by the Committee.
9.2 Value of Performance Units/Shares and Cash-Based Awards. Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as may be determined by the Committee. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares and Cash-Based Awards that will be paid out to the
Participant. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."
9.3 Earning of Performance Units/Shares and Cash-Based Awards. Subject
to the terms of this Plan, after the applicable Performance Period has ended,
the holder of
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Performance Units/Shares and Cash-Based Awards shall be entitled
to receive payout on the number and value of Performance Units/Shares and
Cash-Based Awards earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding performance
goals have been achieved.
9.4 Form and Timing of Payment of Performance Units/Shares and
Cash-Based Awards.
Payment of earned Performance Units/Shares and Cash-Based Awards shall
be as determined by the Committee and as evidenced in the Award Agreement.
Subject to the terms of the Plan, the Committee, in its sole discretion, may pay
earned Performance Units/Shares and Cash-Based Awards in the form of cash or in
Shares (or in a combination thereof) that have an aggregate Fair Market Value
equal to the value of the earned Performance Units/Shares and Cash-Based Awards
at the close of the applicable Performance Period. Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.
At the discretion of the Committee, Participants holding Performance
Units/Shares may be entitled to receive dividend units with respect to dividends
declared with respect to the Shares. Such dividends may be subject to the same
accrual, forfeiture, and payout restrictions as apply to dividends earned with
respect to Shares of Restricted Stock, as set forth in Section 8.6 herein, as
determined by the Committee.
9.5 Termination of Employment/Directorship. In the event the employment
or directorship terminates for any reason, including by reason of death,
Disability, or Retirement, all Performance Units/Shares and Cash-Based Awards
shall be forfeited by the Participant to the Company unless determined otherwise
by the Committee, as set forth in the Participant's Award Agreement.
9.6 Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares and Cash-Based Awards may not be sold,
transferred, pledged, assigned, or other-wise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, a Participant's rights
under the Plan shall be exercisable during the Participant's lifetime only by
the Participant.
Article 10. Other Awards
The Committee shall have the right to grant other Awards which may
include, without limitation, the grant of shares based on attainment of
performance goals established by the Committee, the payment of Shares in lieu of
cash or cash based on attainment of performance goals established by the
Committee, and the payment of Shares in lieu of cash under other Company
incentive or bonus programs. Payment under or settlement of any such Awards
shall be made in such manner and at such times as the Committee may determine.
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Article 11. Performance Measures
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 11, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees that are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be based upon one or more of the
following performance based criteria, either on a Company-specific basis or in
comparison with peer group performance:
(a) Earnings per share;
(b) Net income (before or after taxes);
(c) Return measures (including, but not limited to,
return on assets, equity, or sales);
(d) Cash flow (including, but not limited to, operating
cash flow and free cash flow);
(e) Cash flow return on investments, which equals net
cash flows divided by owner's equity;
(f) Earnings before or after taxes, interest,
depreciation and/or amortization;
(g) Internal rate of return or increase in net present
value;
(h) Dividends paid;
(i) Gross revenues;
(j) Gross margins;
(k) Share price performance (including, but not limited
to, growth measures and total shareholder return);
(l) Customer satisfaction measures; and
(m) Price earnings ratio.
The Committee in its sole discretion shall have the ability to set such
performance measures at the corporate level or the business unit level.
The Committee may exclude various items and occurrences from business
results before determining Awards under the Plan. To the extent such exclusions
affect Awards to executives covered by Section 162(m), they will be prescribed
in resolutions that meet the requirements of Section 162(m) for deductibility.
Notwithstanding anything contained herein, Awards that are designed to
qualify for the Performance-Based Exception, and that are held by Covered
Employees, may not be adjusted upward (the Committee shall retain the discretion
to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is
15
advisable to grant Awards that shall not qualify for the Performance-Based
Exception, the Committee may make such grants without satisfying the
requirements of Code Section 162(m). No payment for Awards that are designed to
qualify for the Performance-Based Exception shall be paid until the Committee
certifies in writing that the performance goals and all material terms of the
Award were in fact satisfied. Approved minutes of the Committee meeting in which
the certification is made shall be treated as a written certification.
Article 12. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
Article 13. Deferrals
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares and Cash-Based Awards. If any such deferral election is
required or permitted, the Committee shall, in its sole discretion, establish
rules and procedures for such payment deferrals.
Article 14. Rights of Employees/Directors
14.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company, or any right in any Director to be retained in the service of the
Company.
14.2 Participation. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
14.3 Rights as a Stockholder. A Participant shall have none of the
rights of a shareholder with respect to shares of Common Stock covered by any
Award until the Participant becomes the record holder of such shares.
Article 15. Change in Control
16
15.1 Treatment of Outstanding Awards. Upon the occurrence of a Change
in Control, unless otherwise specifically prohibited under applicable laws, or
by the rules and regulations of any governing governmental agencies or national
securities exchanges, or unless the Committee shall determine otherwise in the
Award Agreement:
(a) Any and all Options and SARs granted hereunder shall
become immediately exercisable, and shall remain
exercisable throughout their entire term;
(b) Any restriction periods and restrictions imposed on
Restricted Shares that are not performance-based
shall lapse; and
(c) The target payout opportunities attainable under all
outstanding Awards of performance-based Restricted
Stock, Performance Units, Performance Shares, and
Cash-Based Awards shall be deemed to have been fully
earned for the entire Performance Period(s) as of the
effective date of the Change in Control. The vesting
of all Awards denominated in Shares shall be
accelerated as of the effective date of the Change
in Control, and there shall be paid out to
Participants within thirty (30) days following the
effective date of the Change in Control a pro rata
number of shares based upon an assumed achievement of
all relevant targeted performance goals and upon the
length of time within the Performance Period that has
elapsed prior to the Change in Control. Awards
denominated in cash shall be paid pro rata to
participants in cash within thirty (30) days
following the effective date of the Change in
Control, with the proration determined as a
function of the length of time within the Performance
Period that has elapsed prior to the Change in
Control, and based on an assumed achievement of all
relevant targeted performance goals.
15.2 Termination, Amendment, and Modifications of Change-in-Control
Provisions.
Notwithstanding any other provision of this Plan (but subject to the
limitations of Section 16.3 hereof) or any Award Agreement provision, the
provisions of this Article 15 may not be terminated, amended, or modified on or
after the date of a Change in Control to affect adversely any Award theretofore
granted under the Plan without the prior written consent of the Participant with
respect to said Participant's outstanding Awards; provided, however, the Board
may terminate, amend, or modify this Article 15 at any time and from time to
time prior to the date of a Change in Control.
14.3 Pooling of Interests Accounting. Notwithstanding any other
provision of the Plan to the contrary, in the event that the consummation of a
Change in Control is contingent on using pooling of interests accounting
methodology, the Board may take any action necessary to preserve the use of
pooling of interests accounting.
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Article 16. Amendment, Modification, Termination and Bifurcation
16.1 Amendment, Modification, and Termination. Subject to the terms of
the Plan, the Committee may at any time and from time to time, alter, amend,
suspend, or terminate the Plan in whole or in part; provided, that no such
amendment shall be made without the approval of the Company shareholders (a)
that would increase the number of Shares available for issuance in accordance
with the Plan; or (b) if such approval is required, (i) to comply with Section
422 of the Code with respect to Incentive Stock Options; or (ii) for purposes of
Section 162(m) of the Code.
16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events.
The Committee may make adjustments in the terms and conditions of, and
the criteria included Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3 hereof)
affecting the Company or the financial statements of the Company or of changes
in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan; provided that, no such adjustment shall be
authorized to the extent that such authority would be inconsistent with the
Plan's or any Award's meeting the requirements of Section 162(m) of the Code, as
from time to time amended.
16.3 Awards Previously Granted. Notwithstanding any other provision of
the Plan to the contrary (but subject to Section 15.2 hereof), no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
16.4 Compliance with Code Section 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan to Employees
who are or could reasonably become Covered Employees as determined by the
Committee shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines at the time it makes an
Award or Award(s) available for grant under the Plan that such compliance is not
desired with respect to any Award or Awards available for grant under the Plan,
then compliance with Code Section 162(m) will not be required. In addition, in
the event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award or Awards available under the Plan, the
Committee may, subject to this Article 16, make any adjustments it deems
appropriate.
16.5 Bifurcation of the Plan. Notwithstanding anything in the Plan to
the contrary, the Committee, in its sole discretion, may bifurcate the Plan so
as to restrict, limit or condition the use of any provision of the Plan to
Participants who are subject to Section 16 of the Exchange Act without so
restricting, limiting, or conditioning the Plan with respect to other
Participants.
Article 17. Withholding
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17.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan.
17.2 Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Board, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax that could be imposed on the transaction. All
such elections shall be irrevocable, made in writing, signed by the Participant,
and shall be subject to any restrictions or limitations that the Committee, in
its sole discretion, deems appropriate.
Article 18. Indemnification
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's articles of incorporation or bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
Article 19. Successors
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of' a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
Article 20. General Provisions
20.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
19
20.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
20.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act., unless determined otherwise by the
Committee. To the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee. All grants and exercises of Options
and other Awards under the Plan shall be executed in accordance with the
requirements of Section 16 of the Exchange Act, as amended and any regulations
promulgated thereunder. To the extent that any of the provisions contained
herein do not conform with Rule 16b-3 of the Act or any amendments thereto, or
any successor regulation, then the Committee may make such modifications so as
to conform the Plan and any Options or other Awards granted hereunder to the
Rules requirements, except only such modifications as to a Performance-Based
Exception as may be prohibited by Code regulation ss. 1.162-27.
20.5 Listing. The Company may use reasonable endeavors to register
Shares allotted pursuant to the exercise of an Option with the United States
Securities and Exchange Commission or to the effect compliance with the
registration, qualification, and listing requirements of any national securities
laws, stock exchange, or automated quotation system.
20.6 Delivery of Title. The Company shall have no obligation to issue
or deliver evidence of title for shares of Shares under the Plan prior to:
(a) Obtaining any approvals from governmental agencies
that the Company determines are necessary or
advisable; and
(b) Completion of any registration or other qualification
of the Shares under any applicable national or
foreign law or ruling of any governmental body that
the Company determines to be necessary or advisable.
20.7 Investment Representations. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
20.8 No Additional Rights. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, or confer upon any Participant any right to continue in
the employ of the Company, or upon any Director the right to continue in service
with the Company.
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20.9 Uncertificated Shares. To the extent that the Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a non-certificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.
20.10 Unfunded Status of the Plan. The Plan is intended to constitute
an "unfunded" Plan. With respect to any payments or deliveries of Shares not yet
made to a Participant by the Company, nothing contained herein shall give any
rights that are greater than those of a general creditor of the Company.
20.11 Governing Law. The Plan and each Award Agreement shall be
governed by the laws of' the state of South Dakota, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of the Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under
the Plan are deemed to submit to the exclusive jurisdiction and venue of the
federal or state courts of South Dakota, to resolve any and all issues that may
arise out of or relate to the Plan or any related Award Agreement.
21