EXHIBIT 10
OTTER TAIL POWER COMPANY
DEFERRED COMPENSATION PLAN FOR DIRECTORS
As Amended and Restated June 21, 2000
TABLE OF CONTENTS
Page
Number
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1. PURPOSE 1
2. PLAN PERIODS 1
3. ADMINISTRATION 1
4. PARTICIPATION 1
5. DEFERRED COMPENSATION ACCOUNTS 2
6. PAYMENT 4
7. ASSIGNMENT 7
8. TERMINATION AND AMENDMENT 8
SCHEDULE A
SCHEDULE B
OTTER TAIL POWER COMPANY
DEFERRED COMPENSATION PLAN FOR DIRECTORS
As Amended and Restated June 21, 2000
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 Company 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 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. In the case of a
Director who first becomes eligible 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. 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 Power Company as reported on the NASDAQ National
Market System on July 3, 2000.
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 and/or
a Deferred Stock Account. The Deferred Cash Account means the
bookkeeping account of this Plan to which a Participant's deemed
cash allocations are credited and 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 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 Company 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 Company subject to the claims of its general
creditors and available for the Company's use for whatever
purpose desired.
(b) The amounts credited to a Deferred Cash 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 the Deferred Cash
Account during such month and shall be credited to 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 the
Deferred Cash Account until such Account is fully distributed.
(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 Power Company 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 Company 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 Company 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 Company, issuance of warrants or other rights
to purchase Common Shares or other securities of the Company 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 Company 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 Company shall distribute the entire amount accumulated
in the Participant's Deferred Compensation Account.
(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 Company, (ii) 12 months after the Participant ceases to be a
Director of the Company, or (iii) 24 months after the Participant
ceases to be a Director of the Company. 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
Company. The actual date that distribution shall commence shall
be a date within the appropriate period determined by the
Committee in its sole discretion.
(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 Company 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) Distributions from the Deferred Stock Account shall be
in Common Shares of the Company. The Common Shares available for
issuance under this Plan shall be issued under, and in accordance
with the terms of, the Otter Tail Power Company 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 to be made (i) within 30 days after the date the
Participant ceases to be a Director of the Company, (ii) 12
months after the Participant ceases to be a Director of the
Company or (iii) 24 months after the Participant ceases to be a
Director of the Company. 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 timing of the distribution, such distribution
shall be within 30 days after the date the Participant ceases to
be a Director of the Company. The actual date of the
distribution shall be a date within the appropriate period
determined by the Committee in its sole discretion. A
distribution from a Participant's Deferred Stock Account shall be
in one lump-sum payment, and a certificate representing the
Common Shares 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 the fractional
share shall be based upon the average of the high and low sale
prices of a Common Share of the Company as reported on the NASDAQ
National Market System on the business day preceding the
distribution 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 Company.
(e) In the event of a Participant's death, the balance of a
Participant's Deferred Cash Account shall be distributed to the
Participant's Beneficiary(ies) over a period of not more than
five years, in accordance with the Participant's choice on
Schedule B to the Plan filed with the Committee. Such
distribution shall be made in a manner consistent with Section
6(c) of the Plan and 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 has commenced, any choice under this
Section 6(d) shall not extend the time of payment of the
Participant's Deferred Cash 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 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.
(f) In the event of a Participant's death, the balance of a
Participant's Deferred Stock Account shall be distributed to the
Participant's Beneficiary(ies) in one lump-sum payment within 30
days after the Participant's death, on a date within such month
to be determined by the Committee in its sole discretion, in
accordance with the provisions of Section 6(d) of the Plan.
(g) 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(g) 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.
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.
OTTER TAIL POWER COMPANY
DEFERRED COMPENSATION PLAN FOR DIRECTORS
As Amended and Restated June 21, 2000
ONE-TIME ELECTION TO CONVERT AMOUNTS
IN DEFERRED CASH ACCOUNT TO DEFERRED STOCK ACCOUNT
SECTION 1. CONVERSION ELECTION.
I hereby irrevocably elect to convert___________% of the
amount in my Deferred Cash Account to the Deferred Stock Account,
in accordance with the terms of the Otter Tail Power Company
Deferred Compensation Plan for Directors, As Amended and Restated
June 21, 2000.
I understand that, in accordance with Section 4(b) of the
Plan, as of July 3, 2000, whole and fractional restricted stock
units (computed to four decimal places) will be credited to my
Deferred Stock Account in an amount determined by dividing the
amount of cash to be converted by the average of the high and low
sale prices of a Common Share of Otter Tail Power Company as
reported on the NASDAQ National Market on July 3, 2000. I
understand that no actual shares will be issued in my name until
I receive a distribution from the Plan and, until such time, my
Deferred Stock Account will be credited with Dividend
Equivalents, which will be converted into additional restricted
stock units, as described in the Plan. I further understand that
the distribution from my Deferred Stock Account will be made in a
lump-sum payment in the form of Common Shares of Otter Tail Power
Company.
SECTION 2. TIMING OF DISTRIBUTION.
I hereby irrevocably elect, in accordance with the terms of
the Plan, to have the distribution from my Deferred Stock Account
to be made as follows:
_____within 30 days after I cease to be a Director of the Company
_____12 months after I cease to be a Director of the Company
_____24 months after I cease to be a Director of the Company
I understand that if no election is made, my distribution
will be made within 30 days after I cease to be a Director of the
Company.
I further understand that the above election as to the
timing of the distribution will not take effect until January 1,
2001, and that if I cease to be a Director prior to that date, my
distribution will be made in Common Shares of Otter Tail Power
Company in one lump-sum payment within 30 days, 12 months or 24
months after I cease to be a Director, whichever period or date
is in accordance with my prior election under the Plan as to the
commencement of my distribution.
SECTION 3. SIGNATURE.
I understand that the above elections are subject to the
terms of the Plan. I acknowledge receipt of a copy of the Plan.
I certify that my elections are not being made in reliance upon
any financial or tax advice given by the Company. I understand
that I should consult my own tax advisor as to the tax
consequences of my elections.
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Witness Participant's Signature
June______, 2000
SCHEDULE A
IRREVOCABLE ELECTION
under the
Otter Tail Power Company
Deferred Compensation Plan for Directors
As Amended and Restated June 21, 2000
THIS IRREVOCABLE ELECTION is being made pursuant to the
Otter Tail Power Company Deferred Compensation Plan for
Directors, As Amended and Restated June 21, 2000 (the "Plan").
Any election under any Section specified below which changes a
prior election under the Plan shall apply only to subsequent Plan
Periods, as defined in the Plan. Terms used herein shall have
the meanings given to them in the Plan.
SECTION 1. DEFERRAL ELECTION.
I hereby irrevocably elect to defer receipt of all or part
of my retainer and/or meeting fees pursuant to the terms of the
Plan and this Irrevocable Election, as indicated below:
_____ % of retainer
_____ % of meeting fees
SECTION 2. FORM OF PAYMENT.
I hereby irrevocably elect to receive payment of the amounts
deferred in accordance with my election above and the terms of
the Plan, in the form indicated below:
_____ Cash
_____ Common Shares of Otter Tail
Power Company. I understand that no actual shares
will be issued in my name until I receive a
distribution from the Plan and, until such time, my
Deferred Stock Account will be credited with
restricted stock units and Dividend Equivalents,
which will be converted into additional restricted
stock units, as described in the Plan.
SECTION 3. TIMING OF DISTRIBUTION.
I hereby irrevocably elect, in accordance with the terms of
the Plan, to have the distribution from my Deferred Cash Account
and/or Deferred Stock Account to commence or be made as follows:
_____ within 30 days after I cease to be a Director of the Company
_____ 12 months after I cease to be a Director of the Company
_____ 24 months after I cease to be a Director of the Company
I understand that if no election is made, my distribution
will commence or be made within 30 days after I cease to be a
Director of the Company.
I further understand that payment from my Deferred Stock
Account, if any, will be in the form of Common Shares of the
Company and will be made only in one lump-sum payment.
SECTION 4. NUMBER OF DISTRIBUTIONS FROM DEFERRED CASH ACCOUNT.
Note: This election applies only to cash distributions
under the Plan from my Deferred Cash Account, if any.
I hereby elect, in accordance with the terms of the Plan, to
receive my cash distributions from my Deferred Cash Account under
the Plan, as indicated below:
_____ In one lump sum
_____ In monthly installments over a period of years
(not to exceed 10 years).
I understand that if no election is made, my cash
distribution will be made in monthly installments over a period
of five years.
SECTION 5. SIGNATURE.
I understand that the above elections are subject to the
terms of the Plan. I acknowledge receipt of a copy of the Plan.
I certify that my elections are not being made in reliance upon
any financial or tax advice given by the Company. I understand
that I should consult my own tax advisor as to the tax
consequences of my elections.
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Witness Participant's Signature
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Date
SCHEDULE B
OTTER TAIL POWER COMPANY
DEFERRED COMPENSATION PLAN FOR DIRECTORS
As Amended and Restated June 21, 2000
SECTION 1. METHOD OF DISTRIBUTION IN CASE OF DEATH.
Deferred Cash Account. In case of my death, I hereby
elect, in accordance with the terms of the Plan, to have the
distribution of my Deferred Cash Account, if any, paid over a
period of _____ year(s) (not to exceed five years) to my
Beneficiary(ies) designated in Section 2 hereof. I understand
that if no election is made, a lump-sum payment will be made to
my Beneficiary(ies) or estate within 30 days of my death.
Deferred Stock Account. In case of my death, I hereby
elect, in accordance with the terms of the Plan, to have the
distribution from my Deferred Stock Account, if any, paid to my
Beneficiary(ies) designated in Section 2 hereof. I understand
that any payments from my Deferred Stock Account will be in the
form of Common Shares of Otter Tail Power Company and will be
made in a lump sum to my Beneficiary(ies) or estate within 30
days of my death, in accordance with the terms of the Plan.
SECTION 2. DESIGNATION OF BENEFICIARY(IES).
In the event of my death, I hereby designate the following
individuals, fiduciaries or other entities, either in their own
right or in their representative capacity, in the proportions and
in the priority of interest designated, to be the beneficiaries
of any benefits owing to me, under the Plan.
PRIMARY BENEFICIARIES - The following beneficiary(ies) shall
receive all benefits payable under the Plan in the event of my
death in the proportions designated hereunder. If any one or
more of the primary beneficiaries designated hereunder shall
predecease me, such beneficiary's share(s) shall be divided
equally among the remaining primary beneficiaries.
NAME AND PRESENT ADDRESS PROPORTIONATE
OF PRIMARY INTEREST OF PRIMARY RELATIONSHIP
BENEFICIARY(IES) BENEFICIARY(IES) TO EMPLOYEE
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Date Participant's Initials
SECONDARY BENEFICIARIES - The following beneficiary(ies)
shall receive all benefits payable under the Plan in the event of
my death in the proportions designated hereunder only if all of
my Primary Beneficiaries have predeceased me. If all Primary
Beneficiaries have predeceased me and if any one or more of the
Secondary Beneficiaries designated hereunder shall predecease me,
such Secondary Beneficiary's share(s) shall be divided equally
among the Secondary Beneficiaries.
PROPORTIONATE
NAME AND PRESENT ADDRESS INTEREST OF
OF SECONDARY SECONDARY RELATIONSHIP
BENEFICIARY(IES) BENEFICIARY(IES) TO EMPLOYEE
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ESTATE - In the event I have declined to designate a
Beneficiary hereunder or if all of the Beneficiaries that I have
designated predecease me, then all benefits payable under the
Plan shall be payable to my Estate.
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Witness Participant's Signature
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Date