OTTER TAIL CORPORATION 1999 STOCK INCENTIVE PLAN 2005 RESTRICTED STOCK AWARD AGREEMENT FOR EMPLOYEES
Exhibit 10-N-8
OTTER TAIL CORPORATION
1999 STOCK INCENTIVE PLAN
2005 RESTRICTED STOCK AWARD AGREEMENT
FOR EMPLOYEES
1999 STOCK INCENTIVE PLAN
2005 RESTRICTED STOCK AWARD AGREEMENT
FOR EMPLOYEES
This Restricted Stock Award Agreement for Employees is between Otter Tail Corporation, a
Minnesota corporation (the “Corporation”), and the person named in the attached Restricted Stock
Award Certificate for Employees who is an employee of the Corporation or one of its Affiliates (the
“Participant”), effective as of the date of grant (the “Grant Date”) set forth in the attached
Restricted Stock Award Certificate for Employees.
WHEREAS, the Corporation, pursuant to the Otter Tail Corporation 1999 Stock Incentive Plan
(the “Plan”), wishes to award to the Participant 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
Employees, 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 Participant hereby agree as follows:
1. Award of Restricted Stock. The Corporation hereby grants to the Participant,
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 Employees (the “Shares”), on the terms
and conditions set forth in this Agreement, the Restricted Stock Award Certificate for Employees
and the 1999 Stock Incentive Plan.
2. Rights of the Participant with Respect to the Shares. With respect to the Shares,
the Participant 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 Participant
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 Employees if the
Participant remains continuously employed by the Corporation or an Affiliate 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 Participant’s employment, the
Participant 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. Additional Vesting Rules; Forfeiture.
(a) If the Participant ceases to be employed by the Corporation or any of its Affiliates by
reason of disability (as determined under any long-term disability program then maintained by the
Corporation or any of its Affiliates that is applicable to the Participant), retirement (normal or
early retirement under any retirement plan of the Corporation or any of its Affiliates that is
applicable to the Participant) or death prior to the vesting of the Shares pursuant to Section 3 or
4 hereof, the shares shall continue to vest, and the restrictions with respect to the
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shares shall lapse in installments on the dates and in the amounts set forth in the Restricted
Stock Award Certificate for Employees for the benefit of the Participant or the Participant’s legal
representatives, beneficiaries, or heirs as the case may be. No transfer by will or the applicable
laws of descent and distribution of any Shares which vest by reason of the Participant’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.
(b) If the Participant elects to terminate the employment relationship with the Corporation or
any of its Affiliates (unless for Good Reason as described in (c) below) or is terminated for
cause, the Participant’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. Unless
otherwise defined in an Employment Agreement dated on or before the Grant Date, cause shall mean
continued failure to substantially perform the Participant’s duties or misconduct that is
materially injurious to the Corporation.
(c) If the Participant is terminated by the Corporation or any of its Affiliates without
cause, or if the Participant elects to terminate employment with the Corporation or any of its
Affiliates for Good Reason (as defined in an Employment Agreement dated on or before the Grant
Date) the shares shall continue to vest, and the restrictions with respect to the shares shall
lapse in installments on the dates and in the amounts set forth in the Restricted Stock Award
Certificate for Employees.
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
Participant’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.”
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(b) Upon execution of this Agreement, the Participant 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 Participant’s name or in the name of
the Participant’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 Participant or the Participant’s legal
representatives, beneficiaries or heirs, as the case may be.
8. Distributions and Adjustments.
(a) If any Shares vest in the Participant 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 Participant shall then receive upon such
vesting the number and type of securities or other consideration which the Participant 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 Participant at the same time cash dividends or other cash distributions are
distributed to shareholders of the Corporation generally.
9. Income Tax Matters.
(a) The Participant acknowledges that the Participant will consult with the Participant’s
personal tax advisor regarding the income tax consequences of the grant of the Shares, payment of
dividends on the Shares and the vesting of the Shares or any other matters related to this
Agreement. In order to comply with all applicable federal or state income tax laws or regulations,
the Corporation may take such action as it deems appropriate to ensure that all applicable federal
or state payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of the Participant, are withheld or collected from the Participant.
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(b) In accordance with the terms of the Plan, and such rules as may be adopted by the
Committee under the Plan, the Participant may elect to satisfy the Participant’s federal and state
income tax withholding obligations arising from the receipt of, or the lapse of restrictions
relating to, the Shares by (i) delivering cash, check (bank check, certified check or personal
check) or money order payable to the order of the Corporation, or (ii) having the Corporation
withhold a portion of the Shares otherwise to be delivered having a Fair Market Value equal to the
amount of such taxes. The Corporation will not deliver any fractional Share but will pay, in lieu
thereof, the Fair Market Value of such fractional Share. The Participant’s election must be made
on or before the date that the amount of tax to be withheld is determined.
10. Miscellaneous.
(a) Nothing contained in this Agreement or the Plan shall confer on the Participant any right
to continue in the employ of the Corporation or any Affiliate or affect in any way the right of the
Corporation or any Affiliate to terminate the employment of the Participant at any time.
(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) This Agreement is subject to the terms of the Plan. Terms used in this Agreement which
are not defined herein shall have the respective meanings given to such terms in the Plan. A copy
of the Plan is available to the Participant upon request.
(d) This Agreement shall be governed by and construed in accordance with the internal laws of
the State of Minnesota, without giving effect to the conflicts of laws principles thereof.
(e) 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.
(f) THIS RESTRICTED STOCK AWARD AGREEMENT FOR EMPLOYEES IS ATTACHED TO AND MADE A PART OF A
RESTRICTED STOCK AWARD CERTIFICATE FOR EMPLOYEES AND SHALL HAVE NO FORCE OR EFFECT UNLESS SUCH
RESTRICTED STOCK AWARD CERTIFICATE FOR EMPLOYEES IS DULY EXECUTED AND DELIVERED BY THE CORPORATION
AND THE PARTICIPANT.
* * * * * * * *
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OTTER TAIL CORPORATION
1999 STOCK INCENTIVE PLAN
1999 STOCK INCENTIVE PLAN
RESTRICTED STOCK AWARD CERTIFICATE FOR EMPLOYEES
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 2005 Restricted Stock Award Agreement for Employees of which this Certificate is a part.
[Name and address of recipient]
[Social Security Number of recipient]
You have been granted the following Award:
Grant Type:
|
Restricted Stock | |
Number of Common Shares: |
||
Grant Date:
|
April 11, 2005 | |
Vesting Schedule: |
| Percentage of | ||||
| Date | Restricted Stock Vested | |||
April 8, 2006 |
25 | % | ||
April 8, 2007 |
25 | % | ||
April 8, 2008 |
25 | % | ||
April 8, 2009 |
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 2005 Restricted Stock Award Agreement for
Employees, 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: | ||||
| Xxxx X. Xxxxxxxx | ||||
| President and Chief Executive Officer | ||||
| [Name of recipient] | ||||
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