exv10w1



 








Exhibit 10.1




OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

2006 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 1999 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 one or more stock certificates, registered in the
Director’s name, representing the Shares. Each such certificate shall be subject to an appropriate
stop-transfer order and shall bear the following legend:




“The Common Shares represented by this certificate are subject to
forfeiture, and the transferability of this certificate and the
Common Shares represented hereby are subject to the restrictions,
terms and conditions (including restrictions against transfer)
contained in the Otter Tail Corporation 1999 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) Each certificate issued pursuant to Section 7(a) hereof, together with the stock power or
stock powers relating to the Shares, shall be deposited by the Corporation with the Secretary of
the Corporation or a custodian designated by the Secretary.



     (d) 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.



     (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.



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     (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

1999 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 1999 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 2006 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:

	 	2,200 
	Grant Date:

	 	April 10, 2006






     Vesting Schedule:



	 	 	 	 	 
	 	 	Percentage of
	Date	 	Restricted Stock Vested
	April 8, 2007
	 	 	25	%
	April 8, 2008
	 	 	25	%
	April 8, 2009
	 	 	25	%
	April 8, 2010
	 	 	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 2006 Restricted Stock Award Agreement for
Directors, a copy of which is attached and made a part of this document, and the Corporation’s 1999
Stock Incentive Plan, a copy of which is enclosed.



	 	 	 	 	 
	OTTER TAIL CORPORATION
	 	 

	 
	 	 
	By:
	 	 
	 

	 	 
	 

	 	John D. Erickson

Its: President & Chief Executive Officer
	 
	 	 
	 
	 	 

	[Name of Recipient]

	 	 







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