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Exhibit 10.3
 
OTTER TAIL CORPORATION
2014 STOCK INCENTIVE PLAN
2014 RESTRICTED STOCK AWARD AGREEMENT
FOR DIRECTORS

This Restricted Stock Award Agreement is between Otter Tail Corporation, a
Minnesota corporation (the “Corporation”), and the person named in the attached
Restricted Stock Award Certificate for Directors who is a Non-employee Director
(“Director”) of the Corporation effective as of the date of grant (the “Grant
Date”) set forth in the attached Restricted Stock Award Certificate for
Directors.

WHEREAS, the Corporation, pursuant to the Otter Tail Corporation 2014 Stock
Incentive Plan (the “Plan”), wishes to award to the Director a number of the
Corporation’s Common Shares, par value $5.00 per share (the “Common Shares”),
subject to certain restrictions and on the terms and conditions contained in
this Agreement and in the attached Restricted Stock Award Certificate for
Directors, which is made a part hereof.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Corporation and the Director hereby agree as
follows:

1.          Award of Restricted Stock.  The Corporation hereby grants to the
Director, effective as of the Grant Date, an award of restricted stock for that
number of Common Shares set forth in the attached Restricted Stock Award
Certificate for Directors (the “Shares”), on the terms and conditions set forth
in this Agreement, the Restricted Stock Award Certificate for Directors and the
Plan.

2.          Rights of the Director with Respect to the Shares.  With respect to
the Shares, the Director shall be entitled at all times on and after the date of
issuance of the Shares to exercise the rights of a shareholder of Common Shares
of the Corporation, including the right to vote the Shares and the right to
receive dividends thereon as provided in Section 8 hereof, unless and until the
Shares are forfeited pursuant to Section 5(b) hereof.  The rights of the
Director with respect to the Shares shall remain forfeitable at all times prior
to the date or dates on which such rights become vested, and the restrictions
with respect to the Shares lapse, in accordance with Section 3, 4 or 5(a)
hereof.

3.          Vesting.  Subject to the terms and conditions of this Agreement, the
Shares shall vest, and the restrictions with respect to the Shares shall lapse,
in installments on the dates and in the amounts set forth in the attached
Restricted Stock Award Certificate for Directors if the Director remains
continuously a Director of the Corporation until the respective vesting dates.
 

 

 

 

4.          Change of Control.  Notwithstanding the vesting provision contained
in Section 3 above, but subject to the other terms and conditions set forth
herein, upon the occurrence of a Change of Control (as defined below) prior to
any termination of the Director’s service on the Board, the Director shall
become immediately and unconditionally vested in all of the Shares, and the
restrictions with respect to all of the Shares shall lapse. As used herein,
“Change of Control” shall mean any of the following events:

(a)           The acquisition by any person, entity or “group,” within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), other than the Corporation or any of its
Affiliates, or any employee benefit plan of the Corporation and/or one or more
of its Affiliates, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of either the then
outstanding Common Shares or the combined voting power of the Corporation’s then
outstanding voting securities in a transaction or series of transactions not
approved in advance by a vote of at least three-quarters of the Continuing
Directors (as hereinafter defined); or

(b)            Individuals who, as of the Grant Date, constitute the Board of
Directors of the Corporation (generally the “Directors” and as of the Grant Date
the “Continuing Directors”) cease for any reason to constitute at least a
majority thereof, provided that any person becoming a Director subsequent to the
Grant Date whose nomination for election was approved in advance by a vote of at
least three-quarters of the Continuing Directors (other than a nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened solicitation with respect to the election or removal of the Directors
of the Corporation, as such terms are used in Rule 14a-11 of Regulation 14A
under the Exchange Act) shall be deemed to be a Continuing Director; or

(c)           The approval by the shareholders of the Corporation of a
reorganization, merger, consolidation, liquidation or dissolution of the
Corporation or of the sale (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Corporation other
than a reorganization, merger, consolidation, liquidation, dissolution or sale
approved in advance by a vote of at least three-quarters of the Continuing
Directors;

(d)           The first purchase under any tender offer or exchange offer (other
than an offer by the Corporation or any of its Affiliates) pursuant to which
Common Shares are purchased; or

(e)           At least a majority of the Continuing Directors determines in
their sole discretion that there has been a change in control of the
Corporation.

5.          Early Vesting; Forfeiture.

(a)            If the Director’s service on the Corporation’s Board ceases for
reason of disability, retirement from the Board or death prior to the vesting of
the Shares pursuant to Section 3 or 4 hereof, the Director or the Director’s
legal representatives, beneficiaries or heirs, as the case may be, shall become
immediately vested, as of the date of such disability, retirement or death, in
all of the unvested Shares, and the restrictions with respect to all of such
Shares shall lapse.  No transfer by will or the applicable laws of descent and
distribution of any Shares which vest by reason of the Director’s death shall be
effective to bind the Corporation unless the Committee shall have been furnished
with written notice of such transfer and a copy of the will or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer.
 

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(b)           If the Director’s service on the Corporation’s Board ceases for
reasons other than disability, retirement or death prior to the vesting of the
Shares pursuant to Section 3 or 4 hereof, the Director’s rights to all of the
unvested Shares shall be immediately and irrevocably forfeited, including the
right to vote such Shares and the right to receive cash dividends.

6.          Restriction on Transfer.  Until the Shares vest pursuant to Section
3, 4 or 5(a) hereof, none of the Shares may be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of or encumbered, and no attempt to
transfer the Shares, whether voluntary or involuntary, by operation of law or
otherwise, shall vest the transferee with any interest or right in or with
respect to the Shares.

7.          Issuance and Custody of Certificates.

(a)           The Corporation shall cause to be issued uncertificated book-entry
shares, registered in the Director’s name, representing the Shares.  These
Shares shall be held as restricted Shares until the vesting dates, be subject to
an appropriate stop-transfer order and shall bear the following restrictive
legend:

       
“The Common Shares represented by book-entry are subject to forfeiture and are
subject to the restrictions against transfer as contained in the Otter Tail
Corporation 2014 Stock Incentive Plan and a Restricted Stock Award Agreement
between Otter Tail Corporation and the registered owner of such shares.  Release
from such restrictions, terms and conditions shall be made only in accordance
with the provisions of the Plan and the Agreement, copies of which are on file
in the office of the Secretary of Otter Tail Corporation.”
 

 
(b)           Upon execution of this Agreement, the Director shall execute and
deliver to the Corporation a stock power or stock powers relating to the Shares.

(c)           After any Shares vest pursuant to Section 3, 4 or 5(a) hereof, and
following payment of the applicable withholding taxes pursuant to Section 9
hereof, the Corporation shall promptly cause to be issued a certificate or
certificates, registered in the Director’s name or in the name of the Director’s
legal representatives, beneficiaries or heirs, as the case may be, representing
such vested Shares (less any shares withheld to pay withholding taxes), free of
the legend provided in Section 7(a) hereof and any stop-transfer order with
respect to such Shares, and shall cause such certificate or certificates to be
delivered to the Director or the Director’s legal representatives, beneficiaries
or heirs, as the case may be.
 

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8.          Distributions and Adjustments.

(a)           If any Shares vest in the Director subsequent to any change in the
number or character of the Common Shares of the Corporation (through
recapitalization, stock split, stock dividend, reorganization, merger,
consolidation or otherwise), the Director shall then receive upon such vesting
the number and type of securities or other consideration which the Director
would have received if such Shares had vested prior to the event changing the
number or character of the outstanding Common Shares.

(b)           Any additional Common Shares of the Corporation, any other
securities of the Corporation and any other property (except for cash dividends
or other cash distributions) distributed with respect to the Shares prior to the
date or dates the Shares vest shall be subject to the same restrictions, terms
and conditions as the Shares to which they relate and shall be promptly
deposited with the Secretary of the Corporation or a custodian designated by the
Secretary.

(c)           Any cash dividends or other cash distributions payable with
respect to the Shares shall be distributed to the Director at the same time cash
dividends or other cash distributions are distributed to shareholders of the
Corporation generally.

9.          Income Tax Matters.  The Director acknowledges that the Director
will consult with the Director’s personal tax advisor regarding the income tax
consequences of the grant of the Shares, or any other matters related to this
Agreement.  Income taxes will not be withheld in connection with the vesting of
shares under this Agreement.

10.        Miscellaneous.

(a)           The Corporation shall reserve and keep available such number of
Common Shares as will be sufficient to satisfy the requirements of this
Agreement.

(b)           The Corporation shall not be required to deliver any Shares until
the requirements of any federal or state securities laws, rules or regulations
or other laws or rules (including the rules of any securities exchange) as may
be determined by the Corporation to be applicable are satisfied.

(c)           If any of the shares covered by this Agreement are not registered
under the Securities Act of 1933 at the time of their issuance hereunder, the
Director represents and agrees that all such shares purchased under this grant
will be acquired for investment and not for resale.

(d)           As used in this Agreement, the term “Common Shares” shall mean the
Common Shares of the Corporation as authorized at the Grant Date and “Fair
Market Value” shall have the meaning ascribed to them in the Plan.
 

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(e)           This grant of Shares is granted pursuant to the Plan and is
subject to all the terms and conditions contained therein. A copy of the Plan is
available to the Director upon request.

(f)            This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota.

(g)           Headings in this Agreement are for convenience of reference only
and shall not be deemed in any way to be material or relevant to the
construction or interpretation of this Agreement or any provision hereof.

(h)            THIS RESTRICTED STOCK AWARD AGREEMENT FOR DIRECTORS IS ATTACHED
TO AND MADE A PART OF A RESTRICTED STOCK AWARD CERTIFICATE FOR DIRECTORS AND
SHALL HAVE NO FORCE OR EFFECT UNLESS SUCH RESTRICTED STOCK AWARD CERTIFICATE FOR
DIRECTORS IS DULY EXECUTED AND DELIVERED BY THE CORPORATION AND THE DIRECTOR.

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OTTER TAIL CORPORATION
2014 STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD CERTIFICATE FOR DIRECTORS

This certifies the award of restricted stock as specified below which has been
granted under the Otter Tail Corporation 2014 Stock Incentive Plan (the “Plan”),
the terms and conditions of which are incorporated by reference herein and made
a part hereof.  In addition, the award shown in this Certificate is
nontransferable and is subject to the terms and conditions set forth in the
attached 2014 Restricted Stock Award Agreement for Directors of which this
Certificate is a part.

[Name and address of recipient]

[Social Security Number of recipient]

You have been granted the following Award:

      Grant Type:  Restricted Stock   Number of Common Shares:      Grant Date:
April 14, 2014  

                                                            
Vesting Schedule:
 
Date
 
Percentage of
Restricted Stock Vested
April 8, 2015
 
25%
April 8, 2016
 
25%
April 8, 2017
 
25%
April 8, 2018
 
25%

By the Corporation’s and your signature below, it is agreed that this award of
restricted stock is governed by the terms and conditions of the 2014 Restricted
Stock Award Agreement for Directors, a copy of which is attached and made a part
of this document, and the Corporation’s 2014 Stock Incentive Plan, a copy of
which is enclosed.

        OTTER TAIL CORPORATION         By:        Edward J. McIntyre    
Its:  Chief Executive Officer              [Name of Recipient]

 

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