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Exhibit 10.53
 
MODIFICATION NUMBER ONE 
TO AMENDED AND RESTATED UNCONDITIONAL GUARANTY
AND REAFFIRMATION OF AMENDED AND RESTATED 
UNCONDITIONAL GUARANTY
 
THIS MODIFICATION NUMBER ONE TO AMENDED AND RESTATED UNCONDITIONAL GUARANTY AND REAFFIRMATION OF AMENDED AND RESTATED UNCONDITIONAL GUARANTY (the “Agreement”), dated as of November 29, 2010 between ASBURY AUTOMOTIVE GROUP, INC., a Delaware corporation (“Guarantor”), and WACHOVIA FINANCIAL SERVICES, INC., a North Carolina corporation (together with its successors and assigns, “Lender”).
 
RECITALS
 
A.    Guarantor has guaranteed (the “Guaranty”) to Lender the payment and performance of all obligations of NP FLM L.L.C., Premier NSN L.L.C., Asbury Atlanta Jaguar, L.L.C., Asbury Atlanta LEX L.L.C., CN Motors, Ltd., C&O Properties, Ltd., CFP Motors, Ltd., Avenues Motors, Ltd., AF Motors, L.L.C., ALM Motors, L.L.C., Asbury-Deland Imports, L.L.C., Coggin Chevrolet L.L.C., Coggin Cars L.L.C., CH Motors, Ltd., HFP Motors L.L.C., Crown GPG L.L.C., Crown CHV L.L.C., Crown GHO L.L.C., Crown GDO L.L.C., Crown RIB L.L.C., Crown Motorcar Company L.L.C., Asbury Automotive Atlanta L.L.C., McDavid Irving-Hon, L.L.C., McDavid Plano-Acra, L.L.C., McDavid Austin-Acra, L.L.C., McDavid Houston-Hon, L.L.C., McDavid Houston-Niss, L.L.C., Asbury Automotive Texas Real Estate Holdings L.L.C. and Asbury Automotive St. Louis, L.L.C. (each referred to herein individually and collectively as “Borrower”) to Lender (collectively, the “Credit Facility”), including any renewals or modifications of the Credit Facility.
 
B.    Lender and Borrower are negotiating a modification of the Credit Facility.
 
C.    Borrower and Lender have agreed to modify the terms of the Credit Facility and in connection therewith, the Guaranty is being modified and must be reaffirmed.
 
In consideration of Lender's continued extension of credit and the agreements contained herein, the parties agree as follows:
 
AGREEMENT
 
DEFINITIONS.  Terms used in this Agreement which are capitalized and not otherwise defined herein shall have the meanings ascribed to such terms in that certain Master Loan Agreement between Lender, Wells Fargo Bank, N.A., as successor by merger to Wachovia Bank, National Association, and Borrower, dated as of June 4, 2008, as modified from time to time (the “Loan Agreement”).
 
 
MODIFICATIONS.
 
1.    The Guaranty is hereby amended by adding the following new Section 3.16 thereto:
 
“3.16    Subsidiaries of Guarantor.  Exhibit 3.16 attached hereto and made a part hereof sets forth a complete and accurate list of all Subsidiaries of Guarantor.”
 
2.    The Guaranty is hereby amended by adding the following new Section 4.10.4 thereto:

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“4.10.4    South Carolina 2010 Seller Real Estate Debt Information.  Without limiting any other delivery requirement herein, on or prior to the consummation of the South Carolina 2010 Acquisition, a non-default certificate signed by Guarantor, in the form attached hereto as Exhibit 4.8, by a principal financial officer of Guarantor warranting that (a) no 'Event of Default' as specified in the Loan Documents nor any event which, upon the giving of notice or lapse of time or both, would constitute such an Event of Default, exists then or will exist after giving effect to the South Carolina 2010 Acquisition or the South Carolina 2010 Seller Real Estate Debt, and (b) demonstrating that Guarantor will be in compliance with the financial covenants contained herein on a pro forma basis (after giving effect to the South Carolina 2010 Acquisition and the South Carolina 2010 Seller Real Estate Debt) for the four fiscal quarter period immediately preceding the date of consummation of the South Carolina 2010 Acquisition.”
 
3.    Section 5.1 of the Guaranty is hereby deleted in its entirety and the following new Section 5.1 is hereby substituted in lieu thereof:
 
“5.1    Debt Prior to Modified Covenant Triggering Event.  Shall not create or permit to exist any Debt, including any guaranties or other contingent obligations.  Notwithstanding anything set forth herein to the contrary:  (a) Guarantor may create or permit to exist (i) any Debt evidenced by the Revolving Credit Facility or any refinancing, modification, renewal or amendment of the Revolving Credit Facility, including any increases in the aggregate principal amounts; (ii) real estate term loans in an aggregate amount not to exceed $30,000,000.00 ('Real Estate Debt Limit') for which Guarantor, Borrower and/or any other Subsidiary of Guarantor has any obligations, including any guaranties or other contingent obligations, to be secured solely by real estate (other than real estate that is included in the Collateral) and to mature no earlier than the Term Loan Maturity Date; provided, however, that the South Carolina Seller Debt shall not count towards the Real Estate Debt Limit; (iii) Debt existing as of March 31, 2009 which is set forth on Exhibit 5.1 hereof and all renewals, refinancings, modifications, amendments and extensions thereof (but not an increase in the aggregate principal amount) on substantially the same terms and conditions and to mature no earlier than the Term Loan Maturity Date and, solely as to the 2014 Senior Subordinated Notes (as hereinafter defined), a one time refinance of such 2014 Senior Subordinated Notes in an aggregate original principal amount not to exceed $200,000,000.00; and (iv) Floor Plan Debt; provided, however, that nothing contained in this Section 5.1 shall be deemed to modify Section 5.15 of the Loan Agreement; and (b) upon the occurrence of a Modified Covenant Triggering Event (as hereinafter defined), this Section 5.1 shall be null and void and of no further force and effect.  For purposes hereof, the term '2014 Senior Subordinated Notes' means those certain 8% senior subordinated notes identified on Exhibit 5.1 issued by Guarantor and due in 2014 in the original principal amount of $200,000,000.00.”
 
4.    The Guaranty is hereby amended by adding the following new Section 6.7 thereto:
 
“6.7    Repayment of 2014 Senior Subordinated Notes.  Guarantor shall cause the Debt and all other outstanding obligations under the 2014 Senior Subordinated Notes to be repaid in full no later than February 16, 2011.” 
 
5.    The Guaranty is hereby amended by adding the attached new Exhibit 3.16.
 
REAFFIRMATION.  Guarantor hereby reaffirms all of Guarantor's liabilities, obligations, duties and responsibilities under and pursuant to the Guaranty, and said Guaranty shall continue in full force and effect as modified hereby, shall continue to guaranty the full, prompt and unconditional payment of the principal, interest and any other amounts to be paid by Borrower and the full, prompt and unconditional performance 

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of all of the covenants, agreements and obligations of Borrower under the Loan Documents, as modified.  Lender and Borrower are negotiating a modification of the Guaranteed Obligations (as defined in the Guaranty).  Guarantor hereby reaffirms, by executing this Modification and Reaffirmation of Guaranty, (i) that following modification of the Guaranteed Obligations as may be agreed by Borrower and Lender, the Guaranty remains in full force and effect, including with respect to the amended Guaranteed Obligations; and (ii) that Guarantor's reaffirmation will not be required as to further amendments to the Guaranteed Obligations as a result of this reaffirmation having been obtained.
 
ACKNOWLEDGMENTS AND REPRESENTATIONS.  Guarantor acknowledges and represents that the Guaranty and other Loan Documents, as amended hereby, are in full force and effect without any defense, counterclaim, right or claim of set-off; that, after giving effect to this Agreement, no Event of Default under the Loan Documents has occurred, all representations and warranties contained in the Loan Documents are true and correct as of the date hereof, all necessary action to authorize the execution and delivery of this Agreement has been taken; and this Agreement is a modification of an existing obligation and is not a novation.
 
MISCELLANEOUS.  This Agreement shall be construed in accordance with and governed by the laws of the Jurisdiction as originally provided in the Loan Documents, without reference to the Jurisdiction's conflicts of law principles.  This Agreement and the other Loan Documents constitute the sole agreement of the parties with respect to the subject matter thereof and supersede all oral negotiations and prior writings with respect to the subject matter thereof.  No amendment of this Agreement, and no waiver of any one or more of the provisions hereof shall be effective unless set forth in writing and signed by the parties hereto.  The illegality, unenforceability or inconsistency of any provision of this Agreement shall not in any way affect or impair the legality, enforceability or consistency of the remaining provisions of this Agreement or the other Loan Documents.  This Agreement and the other Loan Documents are intended to be consistent.  However, in the event of any inconsistencies among this Agreement and any of the Loan Documents, the terms of this Agreement, and then the Guaranty, shall control.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.  Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.  LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM (A “DISPUTE”) THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (A) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (B) PUNITIVE OR EXEMPLARY DAMAGES.   EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.  Final Agreement.  This Agreement and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.    
 
ARBITRATION.  Upon demand of any party hereto, whether made before or after institution of any judicial proceeding, any claim or controversy arising out of or relating to the Loan Documents between parties hereto shall be resolved by binding arbitration conducted under and governed by the Commercial Financial Disputes 

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Arbitration Rules (the “Arbitration Rules”) of the American Arbitration Association (the “AAA”) and the Federal Arbitration Act.  Disputes may include, without limitation, tort claims, counterclaims, a dispute as to whether a matter is subject to arbitration, or claims arising from documents executed in the future, but shall specifically exclude claims brought as or converted to class actions.  A judgment upon the award may be entered in any court having jurisdiction. Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to swap agreements.  Special Rules.  All arbitration hearings shall be conducted in Charlotte, North Carolina.  A hearing shall begin within 90 days of demand for arbitration and all hearings shall conclude within 120 days of demand for arbitration.  These time limitations may not be extended unless a party shows cause for extension and then for no more than a total of 60 days.  The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000.00.  Arbitrators shall be licensed attorneys selected from the Commercial Financial Dispute Arbitration Panel of the AAA.  The parties do not waive applicable Federal or state substantive law except as provided herein.  Preservation and Limitation of Remedies.  Notwithstanding the preceding binding arbitration provisions, the parties agree to preserve, without diminution, certain remedies that any party may exercise before or after an arbitration proceeding is brought.  The parties shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (a) all rights to foreclose against any real or personal property or other security by exercising a power of sale or under applicable law by judicial foreclosure including a proceeding to confirm the sale; (b) all rights of self-help including peaceful occupation of real property and collection of rents, set-off, and peaceful possession of personal property; (c) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and filing an involuntary bankruptcy proceeding; and (d) when applicable, a judgment by confession of judgment.  Any claim or controversy with regard to any party's entitlement to such remedies is a Dispute.  Waiver of Jury Trial.  THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE.
 
[Signatures on following page]
 

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IN WITNESS WHEREOF, the parties hereto have caused this Modification Number One to Amended and Restated Unconditional Guaranty to be duly executed under seal as of the day and year first above written.
 
		
	ASBURY AUTOMOTIVE GROUP, INC., a Delaware corporation

	 
	 

	By:
	/s/Craig T. Monaghan

	 
	Craig Monaghan, its Senior Vice President 
and Chief Financial Officer

	 
	 

	Accepted in Winston-Salem, North Carolina:

	 
	 

	WACHOVIA FINANCIAL SERVICES, INC.,

	 
	 

	By:
	/s/Michael Burkitt

	 
	Name:  Michael Burkitt
Title:    Senior Vice President

 

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State of Georgia
County of Gwinnett
 
Corporate Acknowledgment
 
On this day, before me, the undersigned, a Notary Public, duly commissioned, qualified and acting, within and for said County and State, appeared in person the within named Craig Monaghan, to me personally well known, who stated that he is the Senior Vice President and Chief Financial Officer of Asbury Automotive Group, Inc., a Delaware corporation, and is duly authorized in that capacity to execute the foregoing instrument for and in the name and behalf of said Corporation, and further stated and acknowledged that he had so signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth.
 
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal, this 29th day of November, 2010.
 
                
	
	/s/David Hacman

	(Printed Name of Notary)

 
My commission expires:
 
 
	
	September 3, 2013

	(SEAL)

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State of North Carolina 
County of Forsyth
 
Bank Acknowledgment
On this day, before me, the undersigned, a Notary Public, duly commissioned, qualified and acting, within and for said County and State, appeared in person the within named Michael R. Burkitt (Name), to me personally well known, who stated that he is SVP (Title) of Wachovia Financial Services, Inc., a national banking association, and is duly authorized in that capacity to execute the foregoing instrument for and in the name and behalf of said Bank, and further stated and acknowledged that he had so signed, executed and delivered the foregoing instrument on behalf of the Bank for the consideration, uses and purposes therein mentioned and set forth.
 
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal, this 22nd day of November, 2010.
 
                
	
	/s/ Capria B. Whitlock

	(Printed Name of Notary)

 
My commission expires:
 
 
	
	11/5/2013

	(SEAL)

 

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EXHIBIT 3.16
 
SUBSIDIARIES
 
ASBURY AUTOMOTIVE GROUP,  L.L.C.
ASBURY AUTOMOTIVE MANAGEMENT L.L.C.
ASBURY AUTOMOTIVE JACKSONVILLE, L.P.
ASBURY AUTOMOTIVE TAMPA, L.P. 
ANL, L.P.
ASBURY JAX HOLDINGS, L.P.
AVENUES MOTORS, LTD.
BAYWAY FINANCIAL SERVICES, L.P. 
C&O PROPERTIES, LTD.
CFP MOTORS, LTD. 
CH MOTORS, LTD.
CHO PARTNERSHIP, LTD.
CN MOTORS, LTD.
COGGIN MANAGEMENT, L.P.
CP-GMC MOTORS, LTD.
ASBURY AUTOMOTIVE BRANDON, L.P.
TAMPA HUND, L.P.
TAMPA KIA, L.P.
TAMPA LM, L.P.
TAMPA MIT, L.P.
WMZ MOTORS, L.P.
WTY MOTORS, L.P.
AF MOTORS, L.L.C.
ALM MOTORS, L.L.C.
ASBURY AR NISS L.L.C.
ASBURY ATLANTA AC L.L.C.
ASBURY ATLANTA AU L.L.C.
ASBURY ATLANTA BM L.L.C.
ASBURY ATLANTA CHEVROLET L.L.C.
ASBURY ATLANTA HON L.L.C.
ASBURY ATLANTA INF L.L.C.
ASBURY ATLANTA INFINITI L.L.C.
ASBURY ATLANTA JAGUAR L.L.C.
ASBURY ATLANTA LEX L.L.C.
ASBURY ATLANTA NIS L.L.C.
ASBURY ATLANTA TOY L.L.C.
ASBURY ATLANTA VL L.L.C.
ASBURY AUTOMOTIVE ARKANSAS DEALERSHIP HOLDINGS L.L.C.
ASBURY AUTOMOTIVE ARKANSAS L.L.C.
ASBURY AUTOMOTIVE ATLANTA L.L.C.
ASBURY AUTOMOTIVE ATLANTA II L.L.C.
ASBURY AUTOMOTIVE CENTRAL FLORIDA, L.L.C.
ASBURY AUTOMOTIVE DELAND, L.L.C.
FLORIDA AUTOMOTIVE SERVICES L.L.C. (f/k/a ASBURY AUTOMOTIVE FLORIDA LLC)
ASBURY AUTOMOTIVE FRESNO L.L.C.

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ASBURY AUTOMOTIVE JACKSONVILLE GP L.L.C.
ASBURY AUTOMOTIVE MISSISSIPPI L.L.C.
ASBURY AUTOMOTIVE NORTH CAROLINA DEALERSHIP HOLDINGS L.L.C.
ASBURY AUTOMOTIVE NORTH CAROLINA L.L.C.
ASBURY AUTOMOTIVE NORTH CAROLINA MANAGEMENT L.L.C.
ASBURY AUTOMOTIVE NORTH CAROLINA REAL ESTATE HOLDINGS L.L.C.
ASBURY AUTOMOTIVE OREGON L.L.C.
SOUTHERN ATLANTA AUTOMOTIVE SERVICES L.L.C. (f/k/a GEORGIA AUTOMOTIVE SERVICES L.L.C.) 
ASBURY AUTOMOTIVE SOUTHERN  CALIFORNIA L.L.C.
ASBURY AUTOMOTIVE ST. LOUIS L.L.C.
ASBURY AUTOMOTIVE ST. LOUIS II L.L.C.
ASBURY AUTOMOTIVE TAMPA GP L.L.C.
ASBURY AUTOMOTIVE TEXAS L.L.C.
ASBURY AUTOMOTIVE TEXAS REAL ESTATE HOLDINGS L.L.C.
ASBURY DELAND IMPORTS 2, L.L.C.
ASBURY FRESNO IMPORTS L.L.C.
ASBURY JAX AC, L.L.C.
ASBURY JAX HON L.L.C.
ASBURY JAX K L.L.C.
ASBURY JAX MANAGEMENT L.L.C.
ASBURY JAX VW L.L.C.
ASBURY MS CHEV L.L.C.
ASBURY MS GRAY-DANIELS L.L.C. 
ASBURY NO CAL NISS L.L.C.
ASBURY SACRAMENTO IMPORTS L.L.C.
ASBURY SO CAL DC L.L.C.
ASBURY SO CAL HON L.L.C.
ASBURY SO CAL NISS L.L.C.
ASBURY ST. LOUIS CADILLAC L.L.C.
ASBURY ST. LOUIS LR L.L.C.
ASBURY ST. LOUIS M L.L.C.
ASBURY ST. LOUIS FSKR L.L.C.
ASBURY TAMPA MANAGEMENT L.L.C.
ASBURY-DELAND IMPORTS, L.L.C.
ATLANTA REAL ESTATE HOLDINGS L.L.C.
BFP MOTORS L.L.C.
CAMCO FINANCE II L.L.C.
CK CHEVROLET L.L.C.
CK MOTORS LLC
COGGIN AUTOMOTIVE CORP.
COGGIN CARS L.L.C.
COGGIN CHEVROLET L.L.C.
CROWN ACURA/NISSAN, LLC
CROWN CHH L.L.C.
CROWN CHO L.L.C.
CROWN CHV L.L.C.
CROWN FDO L.L.C.
CROWN FFO HOLDINGS L.L.C.

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CROWN FFO L.L.C.
CROWN GAC L.L.C.
CROWN GBM L.L.C.
CROWN GCA L.L.C.
CROWN GDO L.L.C.
CROWN GHO L.L.C.
CROWN GNI L.L.C.
CROWN GPG L.L.C.
CROWN GVO L.L.C.
CROWN HONDA, L.L.C.
CROWN MOTORCAR COMPANY L.L.C.
CROWN PBM L.L.C.
CROWN RIA L.L.C.
CROWN RIB L.L.C.
CROWN SJC L.L.C.
CROWN SNI L.L.C.
CSA IMPORTS L.L.C.
ESCUDE-NN L.L.C.
ESCUDE-NS L.L.C.
ESCUDE-T L.L.C.
HFP MOTORS L.L.C.
JC DEALER SYSTEMS, LLC 
KP MOTORS L.L.C.
MCDAVID AUSTIN-ACRA, L.L.C.
MCDAVID FRISCO-HON, L.L.C.
MCDAVID GRANDE, L.L.C.
MCDAVID HOUSTON-HON, L.L.C.
MCDAVID HOUSTON-NISS, L.L.C.
MCDAVID IRVING-HON, L.L.C.
MCDAVID OUTFITTERS, L.L.C.
MCDAVID PLANO-ACRA, L.L.C.
NP FLM L.L.C.
NP MZD L.L.C.
NP VKW L.L.C.
PLANO LINCOLN-MERCURY, INC.
PRECISION COMPUTER SERVICES, INC.
PRECISION ENTERPRISES TAMPA, INC.
PRECISION INFINITI, INC.
PRECISION MOTORCARS, INC.
PRECISION NISSAN, INC.
PREMIER NSN L.L.C.
PREMIER PON L.L.C.
PRESTIGE BAY L.L.C.
PRESTIGE TOY L.L.C.
THOMASON AUTO CREDIT NORTHWEST, INC.
THOMASON DAM L.L.C.
THOMASON FRD L.L.C.
THOMASON HUND L.L.C.
THOMASON PONTIAC-GMC L.L.C.

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ASBURY SC LEX L.L.C.
ASBURY SC TOY L.L.C.
ASBURY SC JPV L.L.C.
ARKANSAS AUTOMOTIVE SERVICES, L.L.C.
ASBURY TEXAS D FSKR, L.L.C.
ASBURY TEXAS H FSKR, L.L.C.
MID-ATLANTIC AUTOMOTIVE SERVICES, L.L.C.
MISSISSIPPI AUTOMOTIVE SERVICES, L.L.C.
MISSOURI AUTOMOTIVE SERVICES, L.L.C.
TEXAS AUTOMOTIVE SERVICES, L.L.C.
ASBURY SOUTH CAROLINA REAL ESTATE HOLDINGS L.L.C.
 
 

Page 11a6618109ex10-n1a.htm

Exhibit 10-N-1a

 

FIRST AMENDMENT

OF

OTTER TAIL CORPORATION

DEFERRED COMPENSATION PLAN FOR DIRECTORS

(2003 Restatement)

 

The “OTTER TAIL CORPORATION DEFERRED COMPENSATION PLAN FOR DIRECTORS” established as of November 1, 1983, by the Board of Directors of OTTER TAIL CORPORATION, a Minnesota corporation, as amended and restated in a document entitled “Otter Tail Corporation Deferred Compensation Plan for Directors (2003 Restatement)(hereinafter referred to as the “Plan Statement”), is hereby further amended in the following respects:

 

1.                ADMINISTRATION.  Effective as of January 1, 2005, Section 3 of the Plan Statement is amended by adding subsections (a) and (b) to read in full as follows:

 

	
  

	
(a)

	
Grandfathered Amounts.  All amounts that were deferred under this Plan with respect to periods before January 1, 2005, that have not been previously paid shall be held and paid in accordance with the terms of the Appendix A to this Plan Statement (and not pursuant to Sections 2 through 7 of this Plan Statement).  It is the Corporation’s express intention that, all such amounts deferred and held under the Appendix A are “grandfathered” and, therefore, not subject to the requirements of section 409A of the Code.

 

	
  

	
(b)

	
Non Grandfathered Amounts.  All amounts that were deferred under this Plan with respect to periods after December 31, 2004, that have not been previously paid shall be held and paid in accordance with the terms of this Plan (excluding the Appendix A to this Plan Statement) and in conformity with section 409A of the Code.

 

2.                DEFERRAL ELECTIONS.  Effective for deferral elections made for Plan Years beginning on or January 1, 2005, Section 4(b) of the Plan Statement is amended to read in full as follows:

 

	
  

	
(b)

	
The election to participate shall be made by written notice on Schedule A to the Plan filed with the Committee or its designee prior to the first day of the Plan Year (or such earlier deadline designated by the Committee or its designee); provided, however, for a person who is first elected to the Board after the beginning of the Plan Year, the deferral election must be received by the Committee within 30 days after the first day of such eligibility, and, if so received, the deferral election shall be effective as soon as administratively feasible following such receipt.

 

  

  

  

3.                TERMINATION OF DIRECTORSHIP.  Effective for Plan Years beginning on or after January 1, 2008, Section 4 of the Plan Statement shall be amended to by adding a new Section 4(e) to read in full as follows:

 

	
  

	
(e)

	
A Participant shall experience a Termination of Directorship when the Participant has a complete severance of membership on the Board of Directors of Otter Tail Corporation for any reason other than the Participant’s death.  Whether a Termination of Directorship has occurred is determined under section 409A of the Code and section 1.409A-1(h) of the regulations (i.e., whether the expiration of the director’s term or his or her resignation or removal from the Board constitutes a good-faith and complete termination of the Director’s relationship with Otter Tail Corporation).

 

4.                FINANCIAL HARDSHIP.  Effective January 1, 2009, Section 6(h) of the Plan Statement is amended by adding the following two sentences to the end of Section 6(h):

 

However, when the term “Financial Hardship” shall be construed to have a meaning consistent with the term “Unforeseeable Emergency” as defined in section 409A of the Code.  No amounts shall be paid under this Section (h) unless the distribution meets the requirements of an Unforeseeable Emergency distribution as described in section 409A of the Code.

 

5.                GRANDFATHERED RULES.  Effective January 1, 2005, the Plan Statement shall be amended by adding the following new Appendix A to the end of the Plan Statement.

 

6.                SAVINGS CLAUSE.  Save and except as hereinabove expressly amended, the Plan Statement shall continue in full force and effect.

 

  

-2-

  

 

APPENDIX A

 

OTTER TAIL CORPORATION

 

DEFERRED COMPENSATION PLAN FOR DIRECTORS

 

As Amended and Restated Effective January 1, 2003

 

1.                PURPOSE.  The Plan is designed to provide a method of deferring payment to non-employee Directors of all or part of their retainer and/or meeting fees, as fixed from time to time by the Board of Directors, until termination of their services on the Board.

 

2.                PLAN PERIODS.  The first Plan Period shall commence upon the election of Directors at the 1984 Annual Stockholders’ Meeting and terminate on December 31, 1984.  An additional Plan Period will commence on July 1, 2000 and continue through December 31, 2000 for which a Director may elect to defer all or part of his or her retainer and/or meeting fees for that period in the form of restricted stock units, as provided in Section 5 hereof.  Subsequent Plan Periods shall relate to successive calendar years.

 

3.                ADMINISTRATION.  The Plan shall be administered by a committee of the Board of Directors designated by the Board to administer the Plan (the “Committee”).  The Committee shall be composed solely of two or more “Non-Employee Directors,” within the meaning of Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934.  The Committee shall have the power to interpret the Plan and, subject to its provisions, to make all determinations necessary or desirable for the Plan’s administration.

 

4.                PARTICIPATION.

 

	
  

	
(a)

	
An individual who serves as Director and is not otherwise employed by the Corporation or any of its subsidiaries shall be eligible to participate in the Plan if the Director elects to have payment of his or her retainer and/or meeting fees in respect of a Plan Period deferred as provided herein.

 

	
  

	
(b)

	
The election to participate shall be made by written notice on Schedule A to the Plan filed with the Committee prior to the first day of such Plan Period or, in the case of a Director who first becomes eligible during a Plan Period, not later than 30 days after the Director first becomes eligible.

 

  

-1-

  

	
  

	
(c)

	
At the time a Director elects to participate in the Plan or when the Director makes an election with respect to a subsequent Plan Period, the Director may make a concurrent election on Schedule A to have an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (a “Tax Exempt Organization”), receive all or part of the cash distributions of the Director’s retainer and/or meeting fees, plus accruals thereon, in accordance with the terms of distribution specified on Schedule A (a “Charitable Election”).  At the time a Director makes a Charitable Election, the Director shall also recommend on Schedule A a specific Tax Exempt Organization to receive the distributions, subject to the approval of the Committee.  The Committee shall make the final determination as to the Tax Exempt Organization that will receive the distributions and the Committee retains the authority to designate a different Tax Exempt Organization from the one recommended by the Director.

 

	
  

	
(d)

	
In the case of a Director who first becomes eligible to participate during a Plan Period, the election to participate shall apply only to compensation subsequent to making the election.  Each such election shall be irrevocable.  An election on Schedule A shall remain in effect until changed or rescinded.  Prior to the beginning of any subsequent Plan Period, a Participant may irrevocably elect in writing, by completing a new Schedule A, to change an earlier election with respect to such subsequent Plan Period.  Such new election shall become effective on the first business day of the Plan Period following receipt by the Committee of the new Schedule A.  Notwithstanding the foregoing, a Participant may elect, prior to July 1, 2000, to convert all or part of his or her Deferred Cash Account into the Deferred Stock Account, as such Accounts are described in Section 5 below.  The number of whole and fractional restricted stock units (computed to four decimal places) shall be determined as of July 3, 2000 by dividing the amount of the Deferred Cash Account to be converted by the average of the high and low sale prices of a Common Share of Otter Tail Corporation as reported on the NASDAQ National Market System on July 3, 2000.

 

  

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5.                DEFERRED COMPENSATION ACCOUNTS.

 

	
  

	
(a)

	
An account shall be established for each eligible, electing Director (a “Participant”) which shall be designated as the Participant’s Deferred Compensation Account.  A Participant’s Deferred Compensation Account shall include a Deferred Cash Account, a Charitable Contribution Account, and a Deferred Stock Account, as applicable.  The Deferred Cash Account means the bookkeeping account of this Plan to which a Participant’s deemed cash allocations are credited pursuant to the Plan.  A Charitable Contribution Account means the bookkeeping account of this Plan to which a Participant’s deemed cash allocations are credited pursuant to a Participant’s Charitable Election under this Plan.  The Deferred Stock Account means the bookkeeping account of this Plan to which a Participant’s deemed restricted stock unit allocations are credited pursuant to this Plan.  If a Participant elects to have payment deferred of his or her retainer and/or meeting fees, the amount of the retainer and/or meeting fees payable with respect to a Plan Period shall be credited, (i) in monthly installments as of the last day of each month in the Plan Period to which such retainer and/or meeting fees relate, for amounts credited to the Participant’s Deferred Cash Account or Charitable Contribution Account and (ii) in quarterly installments as of the last day of each calendar quarter in the Plan Period to which such retainer and/or meeting fees relate, for amounts credited to the Participant’s Deferred Stock Account, subject to the provisions of Section 5(d).  The Corporation shall not be required to segregate any amounts credited to the Deferred Compensation Accounts, which shall be established merely as an accounting convenience.  Amounts credited to the Deferred Compensation Accounts shall at all times remain solely the property of the Corporation subject to the claims of its general creditors and available for the Corporation’s use for whatever purpose desired.

 

	
  

	
(b)

	
The amounts credited to a Deferred Cash Account and a Charitable Contribution Account shall, in order to alleviate the adverse effects of an inflationary economy, accrue interest each month at an annual rate equal to the rate charged for prime commercial loans of 90-day maturity (based on actual numbers of days, 360 days to the year), plus 1% as of the last business day of the month.  Such interest shall be computed on the average daily balance in each of the Deferred Cash Account and the Charitable Contribution Account during such month and shall be credited to each such Account and compounded as of the last day of such month.  Interest shall continue to accrue and be compounded on the unpaid balance in each of the Deferred Cash Account and the Charitable Contribution Account until such Account is fully distributed.

 

  

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(c)

	
The amounts credited to a Deferred Stock Account shall be credited in the form of restricted stock units as of the last day of the calendar quarter.  The number of whole and fractional restricted stock units (computed to four decimal places) credited to the Account shall be determined by dividing the amount deferred to the Deferred Stock Account during the quarter by the average of the high and low sale prices of a Common Share of Otter Tail Corporation as reported on the NASDAQ National Market System on the last business day of the quarter.  At such times as cash dividends are declared by the Corporation on its outstanding Common Shares, an amount shall be credited to the Participant’s Deferred Stock Account on the record date for such dividend equal to the amount of dividends that would be paid if the restricted stock units (including a fractional unit) were outstanding Common Shares on such date (“Dividend Equivalents”).  At the end of the calendar quarter in which such Dividend Equivalents are credited to the Participant’s Deferred Stock Account, the Dividend Equivalents shall be converted to additional whole and fractional restricted stock units (computed to four decimal places) in an amount determined by dividing the amount of the Dividend Equivalents by the average of the high and low sale prices of a Common Share of the Corporation as reported on the NASDAQ National Market System on the last business day of the quarter.  In the event of a stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Shares or other securities of the Corporation, issuance of warrants or other rights to purchase Common Shares or other securities of the Corporation or other similar corporate transaction or event that affects the Common Shares, the Committee shall make such adjustments as it deems appropriate in the number of restricted stock units credited to a Participant’s Deferred Stock Account in order to prevent dilution or enlargement of the Participant’s benefits under the Plan.

 

	
  

	
(d)

	
If, prior to the end of a Plan Period, a Participant becomes an employee of the Corporation or one of its subsidiaries or dies or ceases for any reason to be a Director, or if the effective date of participation by a Participant for any Plan Period shall be other than the first day thereof, the Participant will be entitled to be credited with that proportion of the annual retainer for the full Plan Period which the number of days of his or her participation in the Plan during such Plan Period bears to the total number of days in such Plan Period.

 

6.                PAYMENT.

 

	
  

	
(a)

	
Following termination of a Participant’s service on the Board, the Corporation shall distribute the entire amount accumulated in the Participant’s Deferred Compensation Account in accordance with the provisions of this Plan.

 

	
  

	
(b)

	
By written notice on Schedule A to the Plan filed with the Committee, a Participant may elect to have distribution of his or her Deferred Cash Account commence either (i) within 30 days after the date the Participant ceases to be a Director of the Corporation, (ii) 12 months after the Participant ceases to be a Director of the Corporation, or (iii) 24 months after the Participant ceases to be a Director of the Corporation.  Any such election, or any change in such election (by such subsequent written notice to the Committee), shall apply only to future deferrals.  In the event no election is made as to the commencement of a distribution, such distribution shall commence within 30 days after the date the Participant ceases to be a Director of the Corporation.  The actual date that distribution shall commence shall be a date within the appropriate period determined by the Committee in its sole discretion.

 

  

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(c)

	
By written notice on Schedule A to the Plan filed with the Committee, a Participant may choose to receive the distribution of his or her Deferred Cash Account in the form of (i) one lump-sum payment or (ii) monthly distributions over a period selected by the Participant of up to 10 years.  In the event a lump-sum payment is made under the Plan, the amount then standing to the Participant’s credit in his or her Deferred Cash Account, including interest at the rate provided in Section 5(b) to the date of distribution, shall be paid to the Participant on the date determined under Section 6(b).  In the case of a distribution over a period of years, the Corporation shall pay to the Participant, commencing on the date determined under Section 6(b), monthly installments from the amount then standing to the Participant’s credit in his or her Deferred Cash Account, including interest on the unpaid balance at the rate provided in Section 5(b) to the date of distribution.  The amount of each installment shall be determined by dividing the then unpaid balance, plus accrued interest, in the Participant’s Deferred Cash Account by the number of installments remaining to be paid.  If a Participant does not make a choice as to the manner of distribution of his or her Deferred Cash Account, such distribution shall be made in the form of monthly installments paid over a five-year period.  Notwithstanding the above and subject to approval by the Committee, a Participant may at any time request, by written notice to the Committee, to have the monthly payments scheduled to be made to him or her within a tax year paid to him or her in one installment within such year.

 

	
  

	
(d)

	
Amounts credited to a Participant’s Charitable Contribution Account that are to be distributed to a Tax Exempt Organization shall be so distributed as a lump-sum payment within 60 days after the end of the Plan Period for which the Charitable Election was made; provided, however, that in the event of the death of a Participant who has made a Charitable Election, amounts credited to the Participant’s Charitable Contribution Account shall be distributed to the Tax Exempt Organization as a lump-sum payment within 90 days after the Participant’s death.

 

  

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(e)

	
Distributions from the Deferred Stock Account shall be in Common Shares of the Corporation.  The Common Shares available for issuance under this Plan shall be issued under, and in accordance with the terms of, the Otter Tail Corporation 1999 Stock Incentive Plan.  Upon distribution, one Common Share shall be issued for each restricted stock unit, except that no fractional shares shall be issued, and the Participant shall receive a cash payment in lieu of any fractional share.  By written notice on Schedule A to the Plan filed with the Committee, a Participant may elect to have a distribution of his or her Deferred Stock Account commence (i) within 30 days after the date the Participant ceases to be a Director of the Corporation, (ii) 12 months after the Participant ceases to be a Director of the Corporation or (iii) 24 months after the Participant ceases to be a Director of the Corporation.  Any such election, or any change in such election (by subsequent written notice to the Committee), shall apply only to future deferrals.  In the event no election is made as to the commencement of the distribution, such distribution shall commence within 30 days after the date the Participant ceases to be a Director of the Corporation.  The actual date that the distribution shall commence shall be a date within the appropriate period determined by the Committee in its sole discretion.

 

	
  

	
(f)

	
By written notice on Schedule A to the Plan filed with the Committee, a Participant may choose to receive the distribution of his or her Deferred Stock Account in the form of (i) one lump-sum payment or (ii) annual distributions over a period selected by the Participant of up to 10 years.  If a Participant does not make a choice as to the manner of distribution of his or her Deferred Stock Account, such distribution shall be made in the form of a lump-sum payment.  In the event a lump-sum payment is made under the Plan, a certificate representing the Common Shares payable for the whole number of restricted stock units credited to the Participant’s Deferred Stock Account shall be delivered to the Participant or the Participant’s Beneficiary, as the case may be, along with cash in payment of any fractional share, on the date determined under Section 6(d).  In the case of a distribution over a period of years, the Corporation shall pay to the Participant, commencing on the date determined under Section 6(d), annual installments from the number of restricted stock units then credited to the Participant’s Deferred Stock Account, including additional restricted stock units credited as a result of the deemed reinvestment of Dividend Equivalents credited to the Participant’s account.  The amount of each installment shall be determined by dividing the then unpaid balance of restricted stock units by the number of installments remaining to be paid.  A certificate representing the whole number of Common Shares payable for such installment shall be delivered to the Participant or the Participant’s Beneficiary, as the case may be, along with cash in payment of any fractional share.  The value of any fractional share shall be based upon the average of the high and low sale prices of a Common Share of the Corporation as reported on the NASDAQ National Market System on the business day preceding the payment date.  The Participant or the Participant’s Beneficiary, as the case may be, shall have no rights as a holder of Common Shares unless and until a certificate for the shares is issued by the Corporation.

 

  

-6-

  

	
  

	
(g)

	
In the event of a Participant’s death, the balance of a Participant’s Deferred Cash Account or Deferred Stock Account, as the case may be,  shall be distributed to the Participant’s Beneficiary(ies) over a period of not more than five years or in a lump sum, in accordance with the Participant’s choice on Schedule B to the Plan filed with the Committee.  Such distribution shall commence within 30 days after the Participant’s death, on a date within such month to be determined by the Committee in its sole discretion.  Additional annual payments for distributions made over a period of more than one year shall be made on the yearly anniversaries of such date.  In the event of a Participant’s death after distribution of the Deferred Cash Account or Deferred Stock Account, as the case may be, has commenced, any choice under this Section 6(f) shall not extend time of payment of such Account beyond the time when distribution would have been completed if the Participant had lived.  A Participant may change Beneficiary designations by filing a subsequent Schedule B with the Committee.  If a Participant does not make a choice as to the manner of distribution of his or her Deferred Cash Account or Deferred Stock Account, as the case may be, in the event of death, any such distribution shall be made as a lump-sum payment to his or her estate within 30 days after the Participant’s death.

 

	
  

	
(h)

	
Notwithstanding any other provision of the Plan, if the Committee shall determine in its sole discretion that the time of payment of a Participant’s Deferred Compensation Account should be advanced because of protracted illness or other undue hardship, then the Committee may advance the time or times of payment (whether before or after the Director’s retirement date) only if the Committee determines that an emergency beyond the control of the Participant exists and which would cause such Participant severe financial hardship if the payment of such benefits were not approved.  Any such distribution for hardship shall be limited to the amount needed to meet such emergency.  A Participant who receives a hardship distribution may not reenter the Plan for 12 months after the date of such distribution.  Any distribution for hardship under this Section 6(h) shall commence or be made within 30 days after the Committee determines to make such hardship distribution.

 

7.                ASSIGNMENT.  No benefit under the Plan shall in any manner or to any extent be assigned, alienated, or transferred by any Participant or Beneficiary or subject to attachment, garnishment, or other legal process.

 

  

-7-

  

8.                TERMINATION AND AMENDMENT.  The Committee may terminate the Plan at any time so that no further amounts shall be credited to Deferred Compensation Accounts or may, from time to time, amend the Plan, without the consent of Participants or Beneficiaries; provided, however, that no such amendment or termination shall impair any rights which have accrued under the Plan.

 

 

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