Document:

exv10w4

Exhibit 10.4

Form
of Walter Investment Management Corp.

1999 Equity Incentive Plan

Restricted Stock Award Agreement — Nonemployee Director

 

 

Walter Investment Management Corporation

1999 Equity Incentive Plan

Restricted Stock Award Agreement —

Nonemployee Director

You have been selected to receive a grant of Restricted Stock pursuant to the Walter Investment
Management Corporation 1999 Equity Incentive Plan (the “Plan”), as specified below:

Participant:                                                             

Date of Grant: April 29, 2009

Number of Shares of Restricted Stock Granted: 3,078

Purchase Price: $0  per share of Restricted Stock

Final Acceptance Date: May 12, 2009

Lapse of Restriction Date: Restrictions placed on the shares of Restricted Stock shall lapse on the
date and in the amount listed below:

	 	 	 	 	 	 	 	 	 
	Date on Which	 	Number of Shares for	 	Cumulative Number of Shares
	Restrictions Lapse	 	Which Restrictions Lapse	 	for Which Restrictions Lapse
	 
	April 30, 2010
	 	 	–0–	 	 	 	–0–	 
	April 30, 2011
	 	 	–0–	 	 	 	–0–	 
	April 30, 2012
	 	All	 	 	100%	

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of
Restricted Stock by Walter Investment Management Corporation, a Maryland corporation (the
“Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing the Restricted
Stock. If there is any inconsistency between the terms of this Agreement and the terms of the Plan,
the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement.
All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set
forth otherwise herein. The parties hereto agree as follows:

     1. Acceptance of Award. The Participant shall have no rights with respect to this Award unless
he or she shall have accepted this Award prior to the close of business on the Final Acceptance
Date specified above by: (a) making payment to the Company by certified or bank check or other
instrument acceptable to the Committee of the Purchase Price per Restricted Stock , if any, times
the number of Restricted Shares to be accepted, and (b) signing and delivering to the Company a
copy of this Agreement. Upon acceptance of this Award by the Participant, certificates evidencing
the Restricted Stock so accepted shall be issued and held by the Company in escrow, and the
Participant’s name shall be entered as the shareholder of record on the books of the Company. Thereupon, the

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Participant shall have all the rights of a shareholder with respect to such Restricted Stock,
subject, however, to the restrictions and conditions specified in this Agreement.

     2. Service With the Company. Except as may otherwise be provided in Sections 6 or 7, the
Restricted Stock granted hereunder is granted on the condition that the Participant continues
service to the Company as a member of the Board from the Date of Grant through (and including) the
Lapse of Restriction Date, as set forth above (referred to herein as the “Period of Restriction”).

     This grant of Restricted Stock shall not confer any right to the Participant (or any other
Participant) to be granted Restricted Stock or other Awards in the future under the Plan.

     3. Certificate Legend. Each certificate representing shares of Restricted Stock granted
pursuant to the Plan shall bear the following legend:

“The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Walter
Investment Management Corporation 1999 Equity Incentive Plan (the “Plan”),
and in the associated Restricted Stock Award Agreement. A copy of the Plan
and such Restricted Stock Award Agreement may be obtained from Walter
Investment Management Corporation.”

     4. Removal of Restrictions. Except as may otherwise be provided herein and in the Plan, the
shares of Restricted Stock granted pursuant to this Agreement shall become freely transferable by
the Participant on the date and in the amount set forth under the Lapse of Restriction Dates above,
subject to applicable federal and state securities laws. Once shares of Restricted Stock are no
longer subject to any restrictions, the Participant shall be entitled to have the legend required
by Section 3 of this Agreement removed from the applicable stock certificates.

     5. Voting Rights and Dividends. During the Period of Restriction, the Participant may exercise
full voting rights and shall receive all dividends and other distributions paid with respect to the
shares of Restricted Stock on a current basis, in the form and at such time as dividends are paid
on the Company’s outstanding shares of Common Stock.

     6. Termination of Service.

	 	(a)	 	By Death or Disability. If the Participant’s service is terminated
during the Period of Restriction due to death or Disability, then the Participant
shall vest in a pro rata portion of the Award that relates to such Period of
Restriction. The pro rata Award shall equal the product of (x) and (y) where (x) is
the number of restricted shares granted under this Agreement and (y) is a fraction,
the numerator of which is the number of calendar months that the Participant served
as a member of the Board during the Period of Restriction (with any partial month
counting as a full month for this purpose) and the denominator of which is the
number of months in the Period of Restriction.
	 
	 	 	 	For purposes of this Agreement, disability shall be defined as a “permanent and
total disability” within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended and such other disabilities, infirmities, afflictions or
conditions as the Committee by rule may include.

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	 	(b)	 	For Other Reasons. If the service of the Participant shall terminate
for any reason other than death or Disability, the Participant shall forfeit the
entire Restricted Stock award subject to the Compensation Committee’s discretion to
vest all or a portion of the Award.

     7. Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event
of a Change in Control of the Company during the Period of Restriction and prior to the
Participant’s termination of service from the Board, the Period of Restriction and restrictions
imposed on the shares of Restricted Stock shall immediately lapse, with all such shares of
Restricted Stock vesting and becoming freely transferable by the Participant, subject to applicable
federal and state securities laws.

     8. Restrictions on Transfer. During the Period of Restriction, shares of Restricted Stock
granted pursuant to this Agreement may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated (a “Transfer”), other than by will or by the laws of descent and
distribution, except as provided in the Plan. If any Transfer, whether voluntary or involuntary, of
shares of Restricted Stock is made, or if any attachment, execution, garnishment, or lien shall be
issued against or placed upon the shares of Restricted Stock, the Participant’s right to such
shares of Restricted Stock shall be immediately forfeited by the Participant to the Company, and
this Agreement shall lapse.

     9. Recapitalization. In the event of any change in the capitalization of the Company such as a
stock split or a corporate transaction such as any merger, consolidation, separation, or otherwise,
the number and class of shares of Restricted Stock subject to this Agreement shall be equitably
adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.

     10. Beneficiary Designation. The Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any benefit under this
Agreement 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 Participant, shall be in
a form prescribed by the Company, and will be effective only when filed by the Participant in
writing with the Secretary of 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.

     11. Continuation of Service. This Agreement shall not confer upon the Participant any right to
continue service with the Company, nor shall this Agreement interfere in any way with the Company’s
right to terminate the Participant’s service at any time.

     12. Miscellaneous.

	 	(a)	 	This Agreement and the rights of the Participant hereunder are subject
to all the terms and conditions of the Plan, as the same may be amended from time
to time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. The Committee shall have the right to impose such
restrictions on any shares acquired pursuant to this Agreement, as it may deem
advisable, including, without limitation, restrictions under applicable federal
securities 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. It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan and this Agreement, all
of which shall be binding upon the Participant.

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	 	(b)	 	The Committee may terminate, amend, or modify the Plan; provided,
however, that no such termination, amendment, or modification of the Plan may in
any material way adversely affect the Participant’s rights under this Agreement,
without the written consent of the Participant.
	 
	 	(c)	 	The Participant acknowledges and agrees that the Company shall have the
power and the right to deduct or withhold, an amount sufficient to satisfy federal,
state, and local taxes (including the Participant’s FICA obligation), domestic or
foreign, required by law to be withheld with respect to any exercise of the
Participant’s rights under this Agreement should Participant fail to make timely
payment of all taxes due.
	 
	 	 	 	The Participant may elect, subject to any procedural rules adopted by the
Committee, to satisfy the withholding requirement, in whole or in part, by having
the Company withhold Shares having an aggregate Fair Market Value on the date the
tax is to be determined, equal to the minimum amount required to be withheld.
	 
	 	(d)	 	The Participant agrees to take all steps necessary to comply with all
applicable provisions of federal and state securities laws in exercising his or her
rights under this Agreement.
	 
	 	(e)	 	This Agreement 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.
	 
	 	(f)	 	All obligations of the Company under the Plan and this Agreement, with
respect to the Restricted Stock, 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.
	 
	 	(g)	 	To the extent not preempted by federal law, this Agreement shall be
governed by, and construed in accordance with, the laws of the state of Maryland.
	 
	 	(h)	 	To the extent any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
	 
	 	(i)	 	Notice hereunder shall be given to the Company at its principal place
of business, and shall be given to the Participant at the address set forth below,
or in either case at such addresses as one party may subsequently furnish to the
other party in writing.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the Date
of Grant.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Walter Investment Management Corp.  
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Participant
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Participant’s name and address:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 

6exv10w1

Exhibit 10.1

STANDSTILL AGREEMENT

     AGREEMENT, dated May 1, 2009, by and between Otter Tail Corporation, a Minnesota corporation
(the “Company”), and Cascade Investment, L.L.C. (“Cascade”).

     WHEREAS, Cascade is the beneficial owner of 3,406,499, or approximately 9.6%, of the
outstanding common shares, $5 par value per share, of the Company (the “Common Shares”);

     WHEREAS, the parties hereto wish to provide for a constructive, orderly and mutually
beneficial relationship between themselves;

     WHEREAS, Cascade proposes to acquire additional Common Shares in one or more transactions from
time to time, in open market purchases, block transactions, privately negotiated transactions or
otherwise, pursuant to which Cascade may become an “Interested Shareholder” as defined in the
Minnesota Business Corporation Act (the “MBCA”, and such future transactions that collectively
result in Cascade becoming an Interested Shareholder, the Share Purchases”);

     WHEREAS, Cascade would be subject to certain restrictions under Section 673 of the MBCA if it
should proceed with the Share Purchases in the absence of approval thereof by a committee of
“Disinterested Directors” (as defined in Section 673 of the MBCA) formed by the Company’s Board of
Directors and Cascade has requested that the Company’s Board of Directors consider approving the
Share Purchases in accordance with Section 673 of the MBCA and, in connection with obtaining such
approval, Cascade has agreed to enter this Agreement; and

     WHEREAS, a committee of Disinterested Directors (such committee, the “Special Committee”) has
approved the Share Purchases in accordance with Section 673 of the MBCA, subject to the execution
and delivery of this Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Certain Definitions.

     (a) “Acquisition Transaction” shall mean the acquisition or purchase of all or substantially
all of the assets or securities of, or any merger, consolidation or other form of business
combination with, the Company.

     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules
and regulations of the Securities and Exchange Commission (the “Commission”) thereunder (the
“Exchange Act Rules”) as in effect on the date hereof (the term “registrant” in Rule 12b-2 meaning
in this case the Company or Cascade, as the case may be); except that, for the purposes of this
Agreement, the Company and its subsidiaries shall not be deemed to be Associates or Affiliates of
Cascade and Cascade shall not be deemed to be an Associate or Affiliate of the Company and its
subsidiaries.

 

 

     (c) “beneficial ownership” shall be determined pursuant to Rule 13d-3 of the Exchange Act
Rules (or any successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded and there
shall be no successor rule or statutory provision thereto, pursuant to Rule 13d-3 as in effect on
the date hereof.

     (d) “Holding Company Reorganization” shall mean, collectively, a series of contemporaneous
transactions in form and substance reasonably satisfactory to Cascade involving (i) the formation
by the Company of a new subsidiary, Otter Tail Holding Company (“New Otter Tail”), which will be a
Minnesota corporation; (ii) the formation by New Otter Tail of a new subsidiary, Otter Tail Merger
Sub (“Merger Sub”), which will be a Minnesota corporation; (iii) the exchange of the common stock
of New Otter Tail for the outstanding Common Shares, which Common Shares will thereafter be held by
New Otter Tail; and (iv) the merger of the Company with Merger Sub, pursuant to which the surviving
corporation in the merger will be the Company and will be renamed Otter Tail Power Company, as a
result of which transaction Otter Tail Power Company (formerly the Company) will thereafter be a
wholly owned subsidiary of New Otter Tail.

     (e) “Independent Investment Banker” shall mean a nationally recognized investment banking firm
selected by the affirmative vote of the Board of Directors of the Company (or an appropriate
committee thereof).

     (f) “Permitted Acquisition Transaction” shall mean any Acquisition Transaction by any Person
available to all holders of Voting Securities (A) that is a tender offer (with a mandatory clean-up
or back-end merger at the same price) or (B) that requires a stockholder vote and, in the case of
each of clauses (A) and (B) above, satisfies the following conditions:

          (1) it is recommended by the Board of Directors of the Company; and

          (2) the Board of Directors of the Company shall have received a written opinion of an
Independent Investment Banker that the consideration which the holders of Voting Securities
shall be entitled to receive in such Acquisition Transaction is fair to such stockholders
from a financial point of view.

     (g) “Person” shall mean any individual, firm, corporation or other entity and shall include
any group comprised of any Person and any other Person with whom such Person or an Affiliate or
Associate of such Person has any agreement, arrangement or understanding, directly or indirectly,
for the purpose of acquiring, holding, voting or disposing of any shares of Voting Securities.

     (h) “Standstill Period” shall mean a period of time beginning on the date of the acquisition
of Voting Securities by Cascade such that Cascade’s aggregate beneficial ownership, directly or
indirectly, of Voting Securities is 10% or greater and ending on the date of termination of this
Agreement.

     (i) “Voting Securities” shall mean the issued and outstanding Common Shares and any other
issued and outstanding securities of the Company entitled generally to vote for the election

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of directors of the Company without regard to any specific subsequent event or occurrence.
Any percentage of Voting Securities hereunder shall mean as a percentage of voting power.

     2. Restrictions on Purchases.

     (a) Without the approval of the Board of Directors of the Company, during the Standstill
Period Cascade shall not and shall not permit any of its subsidiaries (which shall include all
entities that Cascade controls, whether in corporate or non-corporate form) to, directly or
indirectly:

          (1) acquire, propose or agree to acquire, by purchase or otherwise, Voting Securities
if such acquisition would result in Cascade having beneficial ownership of 20% or more of
the outstanding Voting Securities (such percentage of Voting Securities, the “Percentage
Limitation”) except (i) by way of stock dividends or other distributions by the Company made
available to holders of Voting Securities generally or (ii) pursuant to a Permitted
Acquisition Transaction;

          (2) form or join any “group” within the meaning of Section 13(d)(3) of the Exchange Act
with respect to Voting Securities other than a group, if any, consisting solely of Cascade,
any of its subsidiaries and William H. Gates III;

          (3) deposit any Voting Securities in a voting trust or subject any Voting Securities to
any voting agreement or similar arrangement with respect to the voting of such Voting
Securities; or

          (4) directly or indirectly become a “participant” in any “solicitation” of “proxies”
(as such terms are defined in Regulation 14A under the Exchange Act) to vote, or to seek to
influence any person or entity with respect to the voting of, any Voting Securities, except
in accordance with matters recommended by the Board of Directors of the Company.

     (b) Anything to the contrary contained in Section 2(a) notwithstanding:

          (1) for the avoidance of doubt, nothing in Section 2(a) shall apply to any portfolio
company of Cascade with respect to which Cascade or any of its subsidiaries is not the party
exercising control over the decision to purchase Voting Securities, provided that
such portfolio company is not acting at the request or direction of or in coordination with
Cascade or any of its subsidiaries;

          (2) Cascade will not be deemed in violation of Section 2(a) if the beneficial ownership
of Cascade exceeds the Percentage Limitation solely as a result of an acquisition of Voting
Securities by the Company or its subsidiaries (including as a result of a redemption or
repurchase by the Company of any Voting Securities) that, by reducing the number of Voting
Securities outstanding, increases the proportionate number of Voting Securities beneficially
owned by Cascade (and its subsidiaries), provided that Cascade does not acquire
additional Voting Securities in violation of Section 2(a) after it has been notified by the
Company of such acquisition of Voting Securities by the Company (or its subsidiaries); and

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          (3) nothing contained in Section 2(a) shall prevent Cascade (or any of its
subsidiaries) from voting any Voting Securities then beneficially owned by Cascade (or any
of its subsidiaries) in any manner.

     (c) For purposes of determining compliance with this Section 2, Cascade shall be entitled to
rely without independent investigation upon the most recent publicly available Form 10-K, Form 10-Q
or Form 8-K (or any successor form) of the Company filed with the Commission reporting the number
of Voting Securities then issued and outstanding.

     3. Representations.

     (a) The Company represents and warrants to Cascade that:

          (1) The Company has the requisite corporate power to enter into, deliver and perform
its obligations under this Agreement. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on its part. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms;

          (2) The execution and delivery of this Agreement and the Share Purchases by Cascade in
accordance with this Agreement will not violate, result in the breach or modification of,
conflict with, constitute a default or result in an acceleration of any obligation under,
result in the imposition of any encumbrance pursuant to, or affect the validity or
effectiveness of, (A) the Articles of Incorporation of the Company, as amended, or Bylaws of
the Company, as amended, of, (B) Section 673 of the MBCA or Minnesota Statute Section
216B.48 or (C) any contract, permit, order or other law applicable to the Company, except
(as to clause (C) only) for any violation, breach, modification, conflict, default,
acceleration, encumbrance or effect which would not have a material adverse effect on the
Company and its subsidiaries taken as a whole. Except for required filings, notifications,
consents, authorizations, approvals, waivers or exemptions to or from a governmental or
regulatory body or authority (“Agency Authorizations”), if any, under (i) state or federal
securities laws, (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the
Federal Energy Regulatory Commission and (iv) the Minnesota Public Utilities Commission, the
North Dakota Public Service Commission and the South Dakota Public Utilities Commission, if
any, which Agency Authorizations referred to in this clause (iv) to the extent required by
the execution and delivery of this Agreement have been made, obtained or requested on or
prior to the date hereof, no Agency Authorization is required to be made, obtained or
requested by the Company in connection with the execution and delivery by the Company of
this Agreement or the Share Purchases; and

          (3) The Board of Directors of the Company and the Special Committee have taken all
actions necessary to approve the Share Purchases in accordance with Section 673 of the MBCA
so as to exempt Cascade from the imposition of the restrictions contained in Section 673 of
the MBCA applicable to a “business combination” (as

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defined in Section 011 of the MBCA) between the Company and Cascade and, to the
knowledge of the Company, no other “fair price”, “moratorium”, “control share acquisition”
or other similar anti-takeover law is applicable to the Share Purchases by Cascade.

     (b) Cascade represents and warrants to the Company that:

          (1) Cascade has the power to enter into, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by Cascade and
constitutes a valid and binding obligation of Cascade enforceable against Cascade in
accordance with its terms; and

          (2) The execution and delivery of this Agreement and the Share Purchases by Cascade in
accordance with this Agreement will not violate, result in the breach or modification of,
conflict with, constitute a default or result in an acceleration of any obligation under,
result in the imposition of any encumbrance pursuant to, or affect the validity or
effectiveness of, any organizational documents of, or any contract, permit, law or order
applicable to, Cascade, except for any violation, breach, modification, conflict, default,
acceleration, encumbrance or effect which would not have a material adverse effect on
Cascade. Except for Agency Authorizations, if any, under (i) state or federal securities
laws, (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the Federal
Energy Regulatory Commission and (iv) the Minnesota Public Utilities Commission, the North
Dakota Public Service Commission and the South Dakota Public Utilities Commission, if any,
no Agency Authorizations is required to be made, obtained or requested by Cascade in
connection with the execution and delivery by Cascade of this Agreement or the Share
Purchases.

     4. Covenants.

     (a) Upon the consummation of the Holding Company Reorganization, Cascade agrees to enter into
a separate standstill agreement (the “New Standstill Agreement”) with New Otter Tail on terms no
less favorable to Cascade than the terms contained in this Agreement.

     (b) Upon the execution and delivery of the New Standstill Agreement, this Agreement shall
automatically terminate and cease to be of any further force or effect.

     5. Specific Enforcement; Consent to Jurisdiction.The Company, on the one hand, and
Cascade, on the other hand, acknowledge and agree that each would be irreparably harmed and would
have no adequate remedy at law if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that,
in addition to any other remedies which may be available, the parties shall be entitled to obtain
temporary and permanent injunctive relief with respect to any breach or threatened breach of, or
otherwise obtain specific performance of, the covenants and other agreements contained in this
Agreement. Each party hereto consents to personal jurisdiction in Minnesota in any action relating
to this Agreement and to the appointment of the Secretary of State of Minnesota as agent for
receipt of service of process.

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     6. Miscellaneous.

     (a) Expenses. Each party shall bear the expenses of its attorneys, investment
advisors or other costs it has incurred.

     (b) Entire Agreement; Amendments. This Agreement embodies the entire agreement
between the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect thereof. This Agreement may be
changed only by an agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge may be sought and in the case of the Company only upon the
approval of a majority of the Board of Directors (or an appropriate committee thereof).

     (c) Termination. This Agreement will remain in full force and effect until the
earliest to occur of the following (as a result of which this Agreement shall immediately terminate
and cease to be in full force and effect): (i) termination by the mutual written agreement of the
Company and Cascade; (ii) the expiration of a period of one year from the date of delivery by
Cascade to the Company of written notice of Cascade’s election to terminate this Agreement, which
notice may be delivered by Cascade to the Company at any time after May 1, 2012; (iii) upon written
notice by Cascade to the Company, any time after a third party (A) commences (for the purposes of
Rule 14d-2 under the Exchange Act Rules) a tender offer or exchange offer for at least 50% of the
outstanding Voting Securities; (B) publicly announces the commencement of a proxy contest with
respect to the election of any directors of the Company; or (C) enters into a definitive agreement
with the Company contemplating the acquisition (by way of merger, tender offer, consolidation,
business combination or otherwise) of at least 50% of the outstanding Voting Securities or all or
any material portion of the assets of the Company (other than as part of the Holding Company
Reorganization); (iv) upon written notice by Cascade to the Company, any time after Cascade had
acquired beneficial ownership of 10% or more of the outstanding Voting Securities but thereafter
has disposed of Voting Securities such that its beneficial ownership at such time is less than 10%
of the outstanding Voting Securities; or (v) pursuant to Section 4(b).

     (d) Headings. The section headings are for convenience only and shall not affect the
construction of any provision of this Agreement. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless otherwise indicated.

     (e) Counterparts. This Agreement may be executed by the parties hereto in
counterparts, and each such executed counterpart shall be an original instrument and all of such
counterparts together shall be deemed to be one and the same instrument.

     (f) Notices. All notices, requests, service of process and other communications
hereunder shall be validly given, made or served, upon delivery, if in writing and delivered
personally, by telex (except for service of process) or sent by registered mail, postage prepaid,
to the parties at the following addresses (or at such other address as shall be specified by like
notice):

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if to the Company:

Otter Tail Corporation

4334 18th Avenue S., Suite 200

Fargo, North Dakota 58103

Attention: General Counsel

Facsimile: (701) 232-4108

with a copy to:

Dorsey & Whitney

50 South Sixth Street

Minneapolis, Minnesota 55402

Attention: Gary L. Tygesson

Facsimile: (612) 340-7800

if to Cascade:

Cascade Investment, L.L.C.

2365 Carillon Point

Kirkland, Washington 98033

Attention: General Counsel

Facsimile: (425) 803-0459

with a copy to:

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Robert P. Davis

Facsimile: (212) 225-3999

     (g) Governing Law. This Agreement shall be governed by the laws of the State of
Minnesota without giving effect to the principles of conflicts of law thereof.

     (h) Successors. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

     (i) Waiver. No failure or delay on the part of any party in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further exercise of any
other power, right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

     (j) Separability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such

7

 

invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions or affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction, and the parties agree to negotiate in good faith an
amendment to this Agreement to cure any such invalidity or unenforceability in a manner designed to
most closely effect the purpose of such term or provision.

     (k) Further Assurances. At the request of either party hereto, the other party hereto
shall execute and deliver to such party such documents and instruments as may be reasonably
necessary to implement or evidence the foregoing.

     (l) Business Days. Any action which is required to be taken hereunder shall be taken
on a business day and where the date required for any action hereunder does not fall on a business
day, such action shall be taken on the next calendar day which is a business day.

[Signature Page to Follow]

8

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.

	 	 	 	 	 	 	 
	 	 	OTTER TAIL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/John Erickson
 

	 	 
	 

	 	Name:
	 	John Erickson	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CASCADE INVESTMENT, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Larson
 

	 	 
	 

	 	Name:
	 	Michael Larson	 	 
	 

	 	Title:
	 	Business Manager	 	 

Signature Page to

Standstill Agreement

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