8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):   April 16, 2012

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota	0-53713	27-0383995
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
215 South Cascade Street, P.O. Box 496, Fergus Falls, MN		56538-0496
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:   (866) 410-8780

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act      (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02.   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)(1)           On April 16, 2012, the shareholders of Otter Tail Corporation (the “Company”) approved an amendment to the 1999 Employee Stock Purchase Plan (the “Purchase Plan”), increasing the number of shares available under the Purchase Plan from 900,000 common shares to 1,400,000 common shares and making certain other changes to the terms of the Purchase Plan.  The 1999 Employee Stock Purchase Plan, As Amended (2012), is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

(2)           On April 16, 2012 the Compensation Committee of the Board of Directors of the Company approved the following changes to the vesting terms of the 2012 Restricted Stock Award Agreement for Executive Officers, 2012 Performance Award Agreement, and 2012 Restricted Stock Unit Award Agreement for awards issued under the Company’s 1999 Stock Incentive Plan:

(i)           The 2012 Restricted Stock Award Agreement for Executive Officers was changed to provide for the immediate, rather than continued, vesting of all unvested shares and the lapse of the restrictions with respect to all shares subject to an award in the event that the executive officer ceases to be employed by the Company due to disability, retirement or death.  In addition, the 2012 Restricted Stock Award Agreement for Executive Officers was changed to remove the references to termination for cause and termination for Good Reason in the vesting terms and to instead provide that the Executive Officer’s rights to all unvested shares will be immediately forfeited upon the Executive Officer’s termination other than for disability, retirement or death.

(ii)           The 2012 Performance Award Agreement was changed to limit the types of termination events pursuant to which an employee will be entitled to receive a payment of the target level amount of the performance award, to disability, retirement and death.  In addition, under the revised 2012 Performance Award Agreement, if an employee resigns for “Good Reason” or is terminated “Without Cause,” the employee will be entitled to receive a pro rata payment of the performance award based on the Company’s performance against the performance goal as of the termination date, instead of being entitled to receive the target level amount under the performance award.

(iii)           The 2012 Restricted Stock Unit Award Agreement was changed to provide for immediate, rather than continued, vesting in the event that the employee’s ceases to be employed by the Company due to disability, retirement or death.

The forms of these agreements are filed hereto as Exhibits 10.2, 10.3, and 10.4 respectively, and are incorporated herein by reference.

2

Item 5.07.  Submission of Matters to a Vote of Security Holders

The Company held its Annual Shareholder Meeting on April 16, 2012.  A total of 36,104,395 shares of the Company’s common stock were entitled to vote as of February 15, 2012, the record date, of which 30,255,053 were voted in person or by proxy at the Annual Meeting.  The matters voted upon and approved by the Company’s shareholders were:

(1)   the election of three members to the Board of Directors;

(2)   the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2012;

(3)   the amendment to add 500,000 shares to the 1999 Employee Stock Purchase Plan and to make certain other changes to the terms of the Plan.

The following is a summary of the voting results for each matter presented to the shareholders:

Election of Directors:

Director’s Name	Votes For	Votes Withheld	Broker Non-Votes
Karen M. Bohn	18,821,251	1,056,684	10,377,118
Edward J. McIntyre	19,085,323	792,612	10,377,118
Joyce Nelson Schuette	18,999,279	878,656	10,377,118

All three directors were re-elected to serve three year terms expiring at the time of the 2015 Annual Shareholder Meeting.

Ratification of the Appointment of Deloitte & Touche LLP:

Votes For	Votes Against	Votes Abstained	Broker Non-Votes
29,200,380	839,140	215,533	-

Approval of Employee Stock Purchase Plan Amendment:

Votes For	Votes Against	Votes Abstained	Broker Non-Votes
18,206,300	1,236,487	435,148	10,377,118

Item 9.01.     Financial Statement and Exhibits

(d)         Exhibits

10.1   1999 Employee Stock Purchase Plan, As Amended (2012)

10.2   Form of 2012 Restricted Stock Award Agreement for Executive Officers

10.3   Form of 2012 Performance Award Agreement

10.4   Form of 2012 Restricted Stock Unit Award Agreement

3

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	OTTER TAIL CORPORATION
Date: April 19, 2012
	By	/s/ Kevin G. Moug
		Kevin G. Moug
		Chief Financial Officer

4

EXHIBIT INDEX

Exhibit	Description of Exhibit
10.1	1999 Employee Stock Purchase Plan, As Amended (2012)
10.2	Form of 2012 Restricted Stock Award Agreement for Executive Officers
10.3	Form of 2012 Performance Award Agreement
10.4	Form of 2012 Restricted Stock Unit Award Agreement

5

EX-10.1

Exhibit 10.1

OTTER TAIL CORPORATION

1999 EMPLOYEE STOCK PURCHASE PLAN

(amended April 10, 2006 and April 16, 2012)

ARTICLE I.  INTRODUCTION

Section 1.01  Purpose.  The purpose of the Plan is to provide employees of the Company and certain related corporations with an opportunity to share in the ownership of the Company by providing them with a convenient means for regular and systematic purchases of Common Stock and, thus, to develop a stronger incentive to work for the continued success of the Company.

Section 1.02  Rules of Interpretation.  It is intended that the Plan be an “employee stock purchase plan” as defined in Section 423(b) of the Code and Treasury Regulations promulgated thereunder.  Accordingly, the Plan shall be interpreted and administered in a manner consistent therewith if so approved.  All Participants in the Plan will have the same rights and privileges consistent with the provisions of the Plan.

Section 1.03  Definitions.  For purposes of the Plan, the following terms will have the meanings set forth below:

(a)           “Acceleration Date” means the earlier of the date of shareholder approval or approval by the Company’s Board of Directors of (i) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Company Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which shareholders of the Company immediately prior to the merger have substantially the same proportionate ownership of stock in the surviving corporation immediately after the merger; (ii) any sale, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (iii) any plan of liquidation or dissolution of the Company.

(b)           “Affiliate” means any subsidiary corporation of the Company, as defined in Section 424(f) of the Code, whether now or hereafter acquired or established.

(c)           “Code” means the Internal Revenue Code of 1986, as amended.

(d)           “Committee” means the committee described in Section 10.01 of the Plan.

(e)           “Common Stock” means the Company’s Common Shares, $5 par value per share, as such stock may be adjusted for changes in the stock or the Company as contemplated by Article XI of the Plan.

(f)           “Company” means Otter Tail Corporation, a Minnesota corporation, and its successors by merger or consolidation as contemplated by Section 11.02 of the Plan.

(g)           “Current Compensation” means all regular wage, salary and commission payments paid by the Company to a Participant in accordance with the terms of his or her employment, but excluding annual bonus payments and all other forms of special compensation.

(h)           “Fair Market Value” as of a given date means the fair market value of the Common Stock determined by such methods or procedures as shall be established from time to time by the Committee, but shall not be less than, if the Common Stock is then quoted on the NASDAQ Stock Market, the average of the high and low sales price as reported on the NASDAQ Stock Market on such date or, if the NASDAQ Stock Market is not open for trading on such date, on the most recent preceding date when it is open for trading.  If on a given date the Common Stock is not traded on an established securities market, the Committee shall make a good faith attempt to satisfy the requirements of this Section 1.03(h) and in connection therewith shall take such action as it deems necessary or advisable.

(i)           “Participant” means a Regular Employee who is eligible to participate in the Plan under Section 2.01 of the Plan and who has elected to participate in the Plan.

(j)           “Participating Affiliate” means an Affiliate which has been designated by the Committee in advance of the Purchase Period in question as a corporation whose eligible Regular Employees may participate in the Plan.

(k)           “Plan” means the Otter Tail Corporation 1999 Employee Stock Purchase Plan, as it may be amended, the provisions of which are set forth herein.

(l)           “Purchase Period” means the period beginning on May 1, 1999 and ending on the last business day in December, 1999 and thereafter each approximate six month period beginning on January 1st and July 1st of each year and ending on the last business day in June and December of each year; provided, however, that the then current Purchase Period will end upon the occurrence of an Acceleration Date.

(m)           “Regular Employee” means an employee of the Company or a Participating Affiliate as of the first day of a Purchase Period, including an officer or director who is also an employee, but excluding an employee whose customary employment is less than 20 hours per week.

(n)           “Stock Purchase Account” means the account maintained on the books and records of the Company recording the amount received from each Participant through payroll deductions made under the Plan.

ARTICLE II.  ELIGIBILITY AND PARTICIPATION

Section 2.01  Eligible Employees.  All Regular Employees shall be eligible to participate in the Plan beginning on the first day of the first Purchase Period to commence after such person becomes a Regular Employee.  Subject to the provisions of Article VI of the Plan, each such employee will continue to be eligible to participate in the Plan so long as he or she remains a Regular Employee.

2

Section 2.02  Election to Participate.  An eligible Regular Employee may elect to participate in the Plan for a given Purchase Period by filing with the Company, in advance of that Purchase Period and in accordance with such terms and conditions as the Committee in its sole discretion may impose, a form provided by the Company for such purpose (which authorizes regular payroll deductions from Current Compensation that continue until the employee withdraws from the Plan or ceases to be eligible to participate in the Plan).

Section 2.03  Limits on Stock Purchase.  No employee shall be granted any right to purchase Common Stock hereunder if such employee, immediately after such a right to purchase is granted, would own, directly or indirectly, within the meaning of Section 423(b)(3) and Section 424(d) of the Code, Common Stock possessing 5% or more of the total combined voting power or value of all the classes of the capital stock of the Company or of all Affiliates.

Section 2.04  Voluntary Participation.  Participation in the Plan on the part of a Participant is voluntary and such participation is not a condition of employment nor does participation in the Plan entitle a Participant to be retained as an employee.

ARTICLE III.  PAYROLL DEDUCTIONS AND STOCK PURCHASE ACCOUNT

Section 3.01  Deduction from Pay.  The form described in Section 2.02 of the Plan will permit a Participant to elect payroll deductions of any multiple of $10 but not less than $10 or more than $2,000 per month of such Participant’s Current Compensation during such Purchase Period, subject to such other limitations as the Committee in its sole discretion may impose.  A Participant may cease making payroll deductions at any time, subject to such limitations as the Committee in its sole discretion may impose.  In the event that during a Purchase Period the entire credit balance in a Participant’s Stock Purchase Account exceeds the product of (a) 85% of the Fair Market Value of the Common Stock on the first business day of that Purchase Period and (b) 2,000 shares, then payroll deductions for such Participant shall automatically cease, and shall resume on the first pay period of the next Purchase Period.

Section 3.02  Credit to Account.  Payroll deductions will be credited to the Participant’s Stock Purchase Account on each applicable payday.

Section 3.03  Interest.  No interest will be paid on payroll deductions or on any other amount credited to, or on deposit in, a Participant’s Stock Purchase Account.

Section 3.04  Nature of Account.  The Stock Purchase Account is established solely for accounting purposes, and all amounts credited to the Stock Purchase Account will remain part of the general assets of the Company or the Participating Affiliate (as the case may be).

Section 3.05  No Additional Contributions.  A Participant may not make any payment into the Stock Purchase Account other than the payroll deductions made pursuant to the Plan.

3

ARTICLE IV.  RIGHT TO PURCHASE SHARES

Section 4.01  Number of Shares.  Each Participant will have the right to purchase on the last business day of the Purchase Period all, but not less than all, of the number of whole and fractional shares, computed to four decimal places, of Common Stock that can be purchased at the price specified in Section 4.02 of the Plan with the entire credit balance in the Participant’s Stock Purchase Account, subject to the limitations that (a) no more than 2,000 shares of Common Stock may be purchased under the Plan by any one Participant for a given Purchase Period, and (b) in accordance with Section 423(b)(8) of the Code, no more than $25,000 in Fair Market Value (determined at the beginning of each Purchase Period) of Common Stock and other stock may be purchased under the Plan and all other employee stock purchase plans (if any) of the Company and the Affiliates by any one Participant for any calendar year.  If the purchases for all Participants for any Purchase Period would otherwise cause the aggregate number of shares of Common Stock to be sold under the Plan to exceed the number specified in Section 10.04 of the Plan, each Participant shall be allocated a pro rata portion of the Common Stock to be sold for such Purchase Period.

Section 4.02  Purchase Price.  The purchase price for any Purchase Period shall be that price as announced by the Committee prior to the first business day of that Purchase Period, which price may, in the discretion of the Committee, be a price which is not fixed or determinable as of the first business day of that Purchase Period; provided, however, that in no event shall the purchase price for any Purchase Period be less than the lesser of (a) 85% of the Fair Market Value of the Common Stock on the first business day of that Purchase Period or (b) 85% of the Fair Market Value of the Common Stock on the last business day of that Purchase Period, in each case rounded up to the next higher full cent.

ARTICLE V.  EXERCISE OF RIGHT

Section 5.01  Purchase of Stock.  On the last business day of a Purchase Period, the entire credit balance in each Participant’s Stock Purchase Account will be used to purchase the number of whole shares and fractional shares, computed to four decimal places, of Common Stock purchasable with such amount (subject to the limitations of Section 4.01 of the Plan), unless the Participant has filed with the Company, in advance of that date and subject to such terms and conditions as the Committee in its sole discretion may impose, a form provided by the Company which requests the distribution of the entire credit balance in cash.

Section 5.02  Notice of Acceleration Date.  The Company shall use its best efforts to notify each Participant in writing at least ten days prior to any Acceleration Date that the then current Purchase Period will end on such Acceleration Date.

ARTICLE VI.  WITHDRAWAL FROM PLAN; SALE OF STOCK

Section 6.01  Voluntary Withdrawal.  A Participant may, in accordance with such terms and conditions as the Committee in its sole discretion may impose, withdraw from the Plan and cease making payroll deductions by filing with the Company a form provided for this purpose.  In such event, the entire credit balance in the Participant’s Stock Purchase Account will be paid to the Participant in cash within 30 days.  A Participant who withdraws from the Plan will not be eligible to reenter the Plan until the beginning of the next Purchase Period following the date of such withdrawal.

4

Section 6.02  Death.  Subject to such terms and conditions as the Committee in its sole discretion may impose, upon the death of a Participant, no further amounts shall be credited to the Participant’s Stock Purchase Account.  Thereafter, on the last business day of the Purchase Period during which such Participant’s death occurred and in accordance with Section 5.01 of the Plan, the entire credit balance in such Participant’s Stock Purchase Account will be used to purchase Common Stock, unless such Participant’s estate has filed with the Company, in advance of that day and subject to such terms and conditions as the Committee in its sole discretion may impose, a form provided by the Company which elects to have the entire credit balance in such Participant’s Stock Account distributed in cash within 30 days after the end of that Purchase Period or at such earlier time as the Committee in its sole discretion may decide.  Each Participant, however, may designate one or more beneficiaries who, upon death, are to receive the Common Stock or the amount that otherwise would have been distributed or paid to the Participant’s estate and may change or revoke any such designation from time to time.  No such designation, change or revocation will be effective unless made by the Participant in writing and filed with the Company during the Participant’s lifetime.  Unless the Participant has otherwise specified the beneficiary designation, the beneficiary or beneficiaries so designated will become fixed as of the date of the death of the Participant so that, if a beneficiary survives the Participant but dies before the receipt of the payment due such beneficiary, the payment will be made to such beneficiary’s estate.

Section 6.03  Termination of Employment.  Subject to such terms and conditions as the Committee in its sole discretion may impose, upon a Participant’s normal or early retirement with the consent of the Company under any pension or retirement plan of the Company or Participating Affiliate, no further amounts shall be credited to the Participant’s Stock Purchase Account. Thereafter, on the last business day of the Purchase Period during which such Participant’s approved retirement occurred and in accordance with Section 5.01 of the Plan, the entire credit balance in such Participant’s Stock Purchase Account will be used to purchase Common Stock, unless such Participant has filed with the Company, in advance of that day and subject to such terms and conditions as the Committee in its sole discretion may impose, a form provided by the Company which elects to receive the entire credit balance in such Participant’s Stock Purchase Account in cash within 30 days after the end of that Purchase Period, provided that such Participant shall have no right to purchase Common Stock in the event that the last day of such a Purchase Period occurs more than three months following the termination of such Participant’s employment with the Company or Participating Affiliate by reason of such an approved retirement.  In the event of any other termination of employment (other than death) with the Company or a Participating Affiliate, participation in the Plan will cease on the date the Participant ceases to be a Regular Employee for any reason.  In such event, the entire credit balance in such Participant’s Stock Purchase Account will be paid to the Participant in cash within 30 days.  For purposes of this Section 6.03, a transfer of employment to any Participating Affiliate or to the Company, or a leave of absence which has been approved by the Committee, will not be deemed a termination of employment as a Regular Employee.

5

ARTICLE VII.  NONTRANSFERABILITY

Section 7.01  Nontransferable Right to Purchase.  The right to purchase Common Stock hereunder may not be assigned, transferred, pledged or hypothecated (whether by operation of law or otherwise), except as provided in Section 6.02 of the Plan, and will not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge, hypothecation or other disposition or levy of attachment or similar process upon the right to purchase will be null and void and without effect.

Section 7.02  Nontransferable Account.  Except as provided in Section 6.02 of the Plan, the amounts credited to a Stock Purchase Account may not be assigned, transferred, pledged or hypothecated in any way, and any attempted assignment, transfer, pledge, hypothecation or other disposition of such amounts will be null and void and without effect.

Section 7.03  Nontransferable Shares.  Except as the Committee shall otherwise permit, prior to the second anniversary of the beginning of any Purchase Period, the Common Stock purchased at the end of such Purchase Period by a Participant pursuant to Section 5.01 of the Plan may not be assigned, transferred, pledged, hypothecated or otherwise disposed of in any way other than by will or by the laws of descent and distribution, and any other attempted assignment, transfer, pledge, hypothecation or other disposition of such share or shares will be null and void and without effect.

ARTICLE VIII.  COMMON STOCK ISSUANCE AND DIVIDEND REINVESTMENT

Section 8.01 Issuance of Purchased Shares.  Promptly after the last day of each Purchase Period and subject to such terms and conditions as the Committee in its sole discretion may impose, the Company will cause the Common Stock then purchased pursuant to Section 5.01 of the Plan to be issued for the benefit of the Participant and held in the Plan pursuant to Section 8.03 of the Plan.

Section 8.02  Completion of Issuance.  A Participant shall have no interest in the Common Stock purchased pursuant to Section 5.01 of the Plan until such Common Stock is issued for the benefit of the Participant pursuant to Section 8.03 of the Plan.

Section 8.03  Form of Ownership.  The Common Stock issued under Section 8.01 of the Plan will be held in the Plan in the name of the Participant or jointly in the name of the Participant and another person, as the Participant may direct on a form provided by the Company, until such time as stock certificates or DRS advices for such shares of Common Stock are delivered to or for the benefit of the Participant pursuant to Section 8.05 of the Plan.

Section 8.04  Automatic Dividend Reinvestment.  Prior to the delivery of stock certificates or DRS advices to or for the benefit of the Participant under Section 8.05 of the Plan, any and all cash dividends paid on full and fractional shares of Common Stock issued under either Section 8.01 of the Plan or this Section 8.04 shall be reinvested to acquire either new issue Common Stock or shares of Common Stock purchased on the open market, as determined by the Committee in its sole discretion.  Purchases of Common Stock under this Section 8.04 will be (a) with respect to shares newly issued by the Company, invested on the dividend payment date, or, if that date is not a trading day, the immediately preceding trading day, or (b) with respect to shares purchased on the open market, normally purchased on the open market within ten business days of the dividend payment date, depending upon market conditions.  The price per share of the Common Stock issued under this Section 8.04 shall be (x) with respect to shares newly issued by the Company, the Fair Market Value of the Common Stock on the applicable investment date, or (y) with respect to shares purchased on the open market, the weighted average price per share at which the Common Stock is actually purchased on the open market for the relevant period on behalf of all participants in the Plan.  All shares of Common Stock acquired under this Section 8.04 will be held in the Plan in the same name as the Common Stock upon which the cash dividends were paid.

6

Section 8.05  Delivery.  At any time following the conclusion of the nontransferability period set forth in Section 7.03 of the Plan and subject to such terms and conditions as the Committee in its sole discretion may impose, by filing with the Company a form provided by the Company for such purpose, the Participant may elect to have the Company cause to be delivered to or for the benefit of the Participant a stock certificate or DRS advice for the number of whole shares and cash for any fractional share representing the Common Stock purchased pursuant to Section 5.01 of the Plan.  Subject to such terms and conditions as the Committee in its sole discretion may impose, a Participant may at any time elect to have the Company cause to be delivered to or for the benefit of the Participant a stock certificate or DRS advice for the number of whole shares and cash for any fractional share representing the Common Stock purchased pursuant to Section 8.04 of the Plan upon the reinvestment of dividends by filing with the Company a form provided by the Company for such purpose.  An election notice will be processed as soon as practicable after receipt.  A stock certificate or DRS advice for whole shares normally will be mailed to the Participant within five business days after receipt of the election notice; provided, however, that if the notice is received between a dividend record date and a dividend payment date, a stock certificate or DRS advice will generally not be sent out until the declared dividends have been reinvested pursuant to Section 8.04 of the Plan.  Any fractional share normally will be sold on the first trading day of each month and a check for the fractional share sent to the Participant promptly thereafter.

ARTICLE IX.  EFFECTIVE DATE, AMENDMENT AND

TERMINATION OF PLAN

Section 9.01  Effective Date.  The Plan was approved by the Board of Directors on December 14, 1998, subject to approval by the shareholders of the Company within twelve (12) months thereafter.

Section 9.02  Plan Commencement.  The initial Purchase Period under the Plan will commence May 1, 1999.  Thereafter, each succeeding Purchase Period will commence and terminate in accordance with Section 1.03(l) of the Plan.

Section 9.03  Powers of Board.   The Board of Directors may amend or discontinue the Plan at any time.  No amendment or discontinuation of the Plan, however, shall be made without shareholder approval that requires shareholder approval under any rules or regulations of the NASDAQ Stock Market or any securities exchange that are applicable to the Company.

7

Section 9.04  Automatic Termination.  The Plan shall automatically terminate when all of the shares of Common Stock provided for in Section 10.04 of the Plan have been sold, provided that such termination shall in no way affect the terms of the Plan pertaining to any Common Stock then held under the Plan.

ARTICLE X.  ADMINISTRATION

Section 10.01  The Committee.  The Plan shall be administered by a committee (the “Committee”) established by the Board of Directors.  The members of the Committee need not be directors of the Company and shall be appointed by and serve at the pleasure of the Board of Directors.

Section 10.02  Powers of Committee.  Subject to the provisions of the Plan, the Committee shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan, to establish deadlines by which the various administrative forms must be received in order to be effective, and to adopt such other rules and regulations for administering the Plan as it may deem appropriate.  The Committee shall have full and complete authority to determine whether all or any part of the Common Stock acquired pursuant to the Plan shall be subject to restrictions on the transferability thereof or any other restrictions affecting in any manner a Participant’s rights with respect thereto but any such restrictions shall be contained in the form by which a Participant elects to participate in the Plan pursuant to Section 2.02 of the Plan.  Decisions of the Committee will be final and binding on all parties who have an interest in the Plan.

Section 10.03  Power and Authority of the Board of Directors.  Notwithstanding anything to the contrary contained herein, the Board of Directors may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan.

Section 10.04  Stock to be Sold.  The Common Stock to be issued and sold under the Plan may be authorized but unissued shares or shares acquired in the open market or otherwise.  Except as provided in Section 11.01 of the Plan, the aggregate number of shares of Common Stock to be sold under the Plan will not exceed 1,400,000 shares.

Section 10.05  Notices.  Notices to the Committee should be addressed as follows:

Otter Tail Corporation

4334 18th Avenue SW, Box 9156

Fargo, ND 58106-9156

Attn: Secretary

ARTICLE XI.  ADJUSTMENT FOR CHANGES

                 IN STOCK OR COMPANY

Section 11.01  Stock Dividend or Reclassification.  If the outstanding shares of Common Stock are increased, decreased, changed into or exchanged for a different number or kind of securities of the Company, or shares of a different par value or without par value, through reorganization, recapitalization, reclassification, stock dividend, stock split, amendment to the Company’s Articles of Incorporation, reverse stock split or otherwise, an appropriate adjustment shall be made in the maximum numbers and kind of securities to be purchased under the Plan with a corresponding adjustment in the purchase price to be paid therefor.

8

Section 11.02  Merger or Consolidation.  If the Company is merged into or consolidated with one or more corporations during the term of the Plan, appropriate adjustments will be made to give effect thereto on an equitable basis in terms of issuance of shares of the corporation surviving the merger or of the consolidated corporation, as the case may be.

ARTICLE XII.  APPLICABLE LAW

Rights to purchase Common Stock granted under the Plan shall be construed and shall take effect in accordance with the laws of the State of Minnesota.

9

EX-10.2

Exhibit 10.2

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

2012 RESTRICTED STOCK AWARD AGREEMENT

FOR EXECUTIVE OFFICERS

This Restricted Stock Award Agreement for Executive Officers is between Otter Tail Corporation, a Minnesota corporation (the “Corporation”), and the person named in the attached Restricted Stock Award Certificate who is an Executive Officer of the Corporation effective as of the date of grant (the “Grant Date”) set forth in the attached Restricted Stock Award Certificate.

WHEREAS, the Corporation, pursuant to the Otter Tail Corporation 1999 Stock Incentive Plan (the “Plan”), wishes to award to the Executive Officer 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, 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 Executive Officer hereby agree as follows:

1.           Award of Restricted Stock.  The Corporation hereby grants to the Executive Officer, 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 (the “Shares”), on the terms and conditions set forth in this Agreement, the Restricted Stock Award Certificate and the Plan.

2.           Rights of the Executive Officer with Respect to the Shares.  With respect to the Shares, the Executive Officer 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 Executive Officer 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 if the Executive Officer remains continuously employed by 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 Executive Officer’s employment, the Executive Officer 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 Executive Officer ceases to be employed by the Corporation by reason of disability (as determined under any long-term disability program then maintained by the Corporation that is applicable to the Executive Officer), retirement (normal or early retirement under any retirement plan of the Corporation that is applicable to the Executive Officer) or death prior to the vesting of the Shares pursuant to Section 3 or 4 hereof, the Executive Officer or the Executive Officer’s legal representatives, beneficiaries or heirs, as the case may be, shall become immediately vested, as of the date of such disability, retirement or death, in all of the unvested Shares, and the restrictions with respect to all of such Shares shall lapse.  No transfer by will or the applicable laws of descent and distribution of any Shares which vest by reason of the Executive Officer’s death shall be effective to bind the Corporation unless the Compensation Committee shall have been furnished with written notice of such transfer and a copy of the will or such other evidence as the Compensation Committee may deem necessary to establish the validity of the transfer.

2

(b)If the Executive Officer’s employment relationship with the Corporation ceases for reasons other than disability, retirement or death prior to the vesting of the Shares pursuant to Section 3 or 4 hereof, the Executive Officer’s rights to all of the unvested Shares shall be immediately and irrevocably forfeited, including the right to vote such Shares and the right to receive cash dividends.

6.           Restriction on Transfer.  Until the Shares vest pursuant to Section 3, 4 or 5(a) hereof, none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, and no attempt to transfer the Shares, whether voluntary or involuntary, by operation of law or otherwise, shall vest the transferee with any interest or right in or with respect to the Shares.

7.           Issuance and Custody of Certificates.

(a)The Corporation shall cause to be issued uncertificated book-entry shares, registered in the Executive Officer’s name, representing the Shares.  These Shares shall be held as restricted Shares until the vesting dates, be subject to an appropriate stop-transfer order and shall bear the following restrictive legend:

“The Common Shares represented by book-entry are subject to forfeiture and are subject to the restrictions against transfer as contained in the Otter Tail Corporation 1999 Stock Incentive Plan and a Restricted Stock Award Agreement between Otter Tail Corporation and the registered owner of such shares.  Release from such restrictions, terms and conditions shall be made only in accordance with the provisions of the Plan and the Agreement, copies of which are on file in the office of the Secretary of Otter Tail Corporation.”

(b)           Upon execution of this Agreement, the Executive Officer shall execute and deliver to the Corporation a stock power or stock powers relating to the Shares.

(c)           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 Executive Officer’s name or in the name of the Executive Officer’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 Executive Officer or the Executive Officer’s legal representatives, beneficiaries or heirs, as the case may be.

8.           Distributions and Adjustments.

(a)           If any Shares vest in the Executive Officer 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 Executive Officer shall then receive upon such vesting the number and type of securities or other consideration which the Executive Officer would have received if such Shares had vested prior to the event changing the number or character of the outstanding Common Shares.

3

(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 Executive Officer at the same time cash dividends or other cash distributions are distributed to shareholders of the Corporation generally.

9.           Income Tax Matters.

(a)           The Executive Officer acknowledges that the Executive Officer will consult with the Executive Officer’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 Executive Officer, are withheld or collected from the Executive Officer.

(b)            In accordance with the terms of the Plan, and such rules as may be adopted by the Compensation Committee under the Plan, you may elect to satisfy your federal and state income tax withholding obligations arising from the receipt of the Shares by (i) delivering cash, check (bank check, certified check or personal check) or money order payable to the order of the Corporation, (ii) having the Corporation withhold a portion of the Shares otherwise to be delivered having a Fair Market Value equal to the amount of the employer’s minimum statutory withholding requirements, or (iii) delivering to the Corporation Common Shares 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.  Your 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 Executive Officer any right to continue in the employ of the Corporation or affect in any way the right of the Corporation to terminate the employment of the Executive Officer 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.

4

(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 Executive Officer 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 EXECUTIVE OFFICERS IS ATTACHED TO AND MADE A PART OF A RESTRICTED STOCK AWARD CERTIFICATE FOR EXECUTIVE OFFICERS AND SHALL HAVE NO FORCE OR EFFECT UNLESS SUCH RESTRICTED STOCK AWARD CERTIFICATE FOR EXECUTIVE OFFICERS IS DULY EXECUTED AND DELIVERED BY THE CORPORATION AND THE EXECUTIVE OFFICER.

* * * * * * * *

5

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD CERTIFICATE FOR EXECUTIVE OFFICERS

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 2012 Restricted Stock Award Agreement for Executive Officers 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 16, 2012
Vesting Schedule:
Date	Percentage of Restricted Stock Vested
April 8, 2013	25%
April 8, 2014	25%
April 8, 2015	25%
April 8, 2016	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 2012 Restricted Stock Award Agreement for Executive Officers, a copy of which is attached and made a part of this document, and the Corporation’s 1999 Stock Incentive Plan.

OTTER TAIL CORPORATION
By:
	[Name of Authorized Officer]
	[Title]
	[Name of recipient]

6

EX-10.3

Exhibit 10.3

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

2012 PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement is between Otter Tail Corporation, a Minnesota corporation (the “Corporation”), and you, as an employee of the Corporation, effective as of the date of grant (the “Grant Date”) set forth in the attached Performance Award Certificate.

WHEREAS, the Corporation, pursuant to the Otter Tail Corporation 1999 Stock Incentive Plan (the “Plan”), wishes to grant to you the opportunity and right to receive a number of the Corporation’s Common Shares, par value $5.00 per share (the “Common Shares”), subject to the terms and conditions contained in this Agreement and in the attached Performance Award Certificate, which is made a part of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Corporation and you hereby agree as follows:

1.Performance Award.  The Corporation hereby grants to you, effective as of the Grant Date, a Performance Award representing the right to receive a specified number of Common Shares, as set forth in the attached Performance Award Certificate and subject to the terms and conditions set forth in this Agreement, the Performance Award Certificate and the Plan.  The Performance Award, to the extent it becomes payable, shall be paid in Common Shares of the Corporation (the “Shares”).

2.Performance Period and Performance Goals.  The performance period for purposes of determining whether the Performance Award will be paid shall be January 1, 2012 through December 31, 2014 (the “Performance Period”).  The performance goals for purposes of determining whether, and the extent to which, the Performance Award will be paid are set forth in Exhibit 1 to this Agreement, which Exhibit is made a part of this Agreement.

3.Payment.  Subject to the provisions of Sections 4 and 5 of this Agreement, the Performance Award shall be paid within 59 days after the January 15 following the end of the Performance Period after the Compensation Committee of the Corporation’s Board of Directors (the “Committee”) determines, in its discretion, whether and to what extent the performance goals have been achieved in accordance with the terms set forth in Exhibit 1 to this Agreement.

4.Forfeiture; Early Vesting.  Notwithstanding the provisions of Section 3 of this Agreement, in the event your employment is terminated during the Performance Period, the Performance Award and your right to receive any Shares shall be immediately and irrevocably forfeited, unless such termination is by reason of:

(a)disability (as determined under any long-term disability program then maintained by the Corporation or any of its Affiliates that is applicable to you),

(b)retirement (normal or early retirement under any retirement plan of the Corporation or any of its Affiliates that is applicable to you), provided you are at least 62 years old at the time of such retirement.

(c)death,

(d)your resignation for “Good Reason” (as defined in your Executive Employment Agreement, dated on or before the Grant Date, between the Corporation and you), or

(e)your termination “Without Cause” (as defined in your Executive Employment Agreement, dated on or before the Grant Date, between the Corporation and you).

In the event your employment is terminated during the Performance Period for one of the reasons enumerated in clauses (a) through (c) above, then you or your estate shall be entitled to receive a payment of the Performance Award based on, and assuming that, the performance goal would be achieved at the Target level, as set forth in Exhibit 1 to this Agreement.  Such payment shall be made as soon as administratively feasible following your separation from service.  In the event your employment is terminated during the Performance Period for one of the reasons enumerated in clause (d) or (e) above or retirement before age 62, then you shall be entitled to receive a pro rata payment of the Performance Award based on the performance of the Company against the performance goal as of the date of such termination, as set forth in Exhibit 1 to this Agreement.  If a payment is made pursuant to this Section 4, no payment shall be made pursuant to Section 3 of this Agreement.

5.Change in Control.  Notwithstanding the provisions of Section 3 of this Agreement, in the event of a “Change in Control” (as defined in the Change in Control Severance Agreement, dated on or before the Grant Date, between the Corporation and you) during the Performance Period that occurs prior to your termination of employment, you shall be entitled to receive a payment of the Performance Award based on, and assuming that, the performance goal would have been achieved at the Target level, as set forth in Exhibit 1 to this Agreement.  Such payment shall be made promptly following the date of the Change in Control.  If a payment is made pursuant to this Section 5, no payment shall be made pursuant to Section 3 of this Agreement.  Notwithstanding the forgoing, no amount shall be paid under this Section 5 unless the event constitutes a “change in the ownership of the Corporation,” “change in effective control of the Corporation,” and/or a “change in the ownership of a substantial portion of the Corporation's assets” as defined under Treasury Regulation § 1.409A-3(i)(5) or such other regulation or guidance issued under Section 409A of the Code.

6.Restriction on Transfer.  The Performance Award, and the right to receive Shares, may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, other than by will or the laws of descent and distribution, and no attempt to transfer the Performance Award, and the right to receive 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 Performance Award or the Shares.  No transfer by will or the applicable laws of descent and distribution of the Performance Award 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.

2

7.Issuance of Shares.  After the Performance Award becomes payable pursuant to Section 3, 4 or 5 hereof, and following payment of the applicable withholding taxes pursuant to Section 8 hereof, the Corporation shall promptly cause to be issued a certificate or certificates, registered in your name or in the name of your legal representatives, beneficiaries or heirs, as the case may be, representing the Shares (less any shares withheld to pay withholding taxes) and shall cause such certificate or certificates to be delivered to you or your legal representatives, beneficiaries or heirs, as the case may be.

8.Income Tax Matters.

(a)           You acknowledge that you will consult with your personal tax advisor regarding the income tax consequences of the grant of the Performance Award, the receipt of Shares upon any payment of the Performance Award, the subsequent disposition of the Shares and 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 your sole and absolute responsibility, are withheld or collected from you.

(b)            In accordance with the terms of the Plan, and such rules as may be adopted by the Committee under the Plan, you may elect to satisfy your federal and state income tax withholding obligations arising from the receipt of the Shares by (i) delivering cash, check (bank check, certified check or personal check) or money order payable to the order of the Corporation, (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, or (iii) delivering to the Corporation Common Shares 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.  Your election must be made on or before the date that the amount of tax to be withheld is determined.

9.Miscellaneous.

(a)Notwithstanding the foregoing, to the extent that any payment due hereunder is (i) deferred compensation subject to section 409A of the Internal Revenue Code, and (ii) is payable to a specified employee (as that term is defined in section 409A), and (iii) is payable on account of the specified employee’s separation from service (as that term is defined in section 409A), payment of any part of such amount that would have been made during the six (6) months following the separation from service shall not then be paid but shall rather be paid on the first day of the seventh (7th ) month following the separation from service.

(i) For this purpose, specified employees shall be identified by the Corporation on a basis consistent with regulations issued under section 409A, and consistently applied to all plans, programs, contracts, etc. maintained by the Corporation that are subject to section 409A.

3

(ii) For this purpose “termination of employment” shall be defined as “separation from service” as that term is defined under section 409A.

(iii) To the extent that 409A is applicable to this Agreement, this Agreement shall be construed and administered to comply with  the rules of section 409A.  Neither the Corporation nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the participant or other person on account of any amounts under this Plan or on account of any failure to comply with any Code section.

(b)Nothing contained in this Agreement or the Plan shall confer on you 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 your employment at any time.

(c)You shall not have any rights of a holder of Common Shares unless and until Shares are actually issued to you after the end of the Performance Period as provided in this Agreement.

(d)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.

(e)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 you upon request.

(f)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.

(g)Headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

(h)THIS PERFORMANCE AWARD AGREEMENT IS ATTACHED TO AND MADE A PART OF A PERFORMANCE AWARD CERTIFICATE AND SHALL HAVE NO FORCE OR EFFECT UNLESS SUCH PERFORMANCE AWARD CERTIFICATE IS DULY EXECUTED AND DELIVERED BY THE CORPORATION AND YOU.

* * * * * * * *

4

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

PERFORMANCE AWARD CERTIFICATE

This certifies the Performance Award, as specified below, 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 2012 Performance Award Agreement of which this Certificate is a part.

[Name and Address of the Participant]

[Social Security Number of the Participant]

You have been granted the following Award:

Grant Type:	Performance Award
Target Number of Common Shares Subject to Award:	______________________
Maximum Number of Common Shares Subject to Award:	______________________
Grant Date:	April 16¸ 2012
Performance Period:	January 1, 2012 – December 31, 2014
Performance Goals:	Set forth in Exhibit 1 to the 2012 Performance Award Agreement

By the Corporation’s and your signature below, it is agreed that this Performance Award is governed by the terms and conditions of the Performance Award Agreement, a copy of which is attached and made a part of this document, and the Plan.

OTTER TAIL CORPORATION
By:
	[Name of Authorized Officer]
	[Title]
[Name of Participant]

Exhibit 1

Performance Goals for Three-Year Performance Period

(January 1, 2012 – December 31, 2014)

			Threshold	Target	Maximum
Performance Goal	Otter Tail TSR performance relative to peer group	<25 %ile	25th %ile	50th %ile	85th %ile or greater
Payment Levels	% of target shares	0%	50%	100%	200%

■   Amounts payable for performance will be treated linearly from threshold to target and from target to maximum.

■   Total Shareholders Return (TSR) = stock price appreciation plus value of dividends.

■   Peer group = Edison Electric Institute Index

EX-10.4

Exhibit 10.4

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

2012 RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement is between Otter Tail Corporation, a Minnesota corporation (the “Corporation”), and the person named in the attached Restricted Stock Unit Award Certificate 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 Unit Award Certificate.

WHEREAS, the Corporation, pursuant to the Otter Tail Corporation 1999 Stock Incentive Plan (the “Plan”), wishes to grant to the Participant the opportunity and right to receive a number of the Corporation’s Common Shares, par value $5.00 per share (the “Common Shares”), subject to the terms and conditions contained in this Agreement and in the attached Restricted Stock Unit Award Certificate, which is made a part of this Agreement.

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.Restricted Stock Unit Award.  The Corporation hereby grants to the Participant, effective as of the Grant Date, a Restricted Stock Unit Award representing the right to receive, on the vesting date or dates set forth in the attached Restricted Stock Unit Award Certificate, a specified number of Common Shares as set forth in the attached Restricted Stock Unit Award Certificate, subject to the terms and conditions set forth in this Agreement, the Restricted Stock Unit Award Certificate and the Plan.  This Restricted Stock Unit Award, to the extent it vests, shall be paid in Common Shares of the Corporation (the “Shares”).

2.Rights of the Participant with Respect to the Shares.  This Restricted Stock Unit Award does not represent Common Shares and does not give the Participant any of the rights and privileges of a holder of Common Shares.  With respect to the Shares, the Participant shall not exercise the rights of a holder of Common Shares, including the right to vote the Shares and the right to receive dividends on the Shares, until such time as this Restricted Stock Unit Award shall vest, and the restrictions with respect to this Restricted Stock Unit Award shall lapse, in accordance with Section 3, 4 or 5 hereof.

3.Vesting.  Subject to the terms and conditions of this Agreement, this Restricted Stock Unit Award shall vest, and the restrictions with respect to this Restricted Stock Unit Award shall lapse, on the date or dates and in the amount or amounts set forth in the attached Restricted Stock Unit Award Certificate if the Participant remains continuously employed by the Corporation or one of its Affiliates 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 this Restricted Stock Unit Award, and the restrictions with respect to this Restricted Stock Unit Award 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)Notwithstanding the foregoing, none of the foregoing events shall constitute a Change of Control unless such event constitutes a Change in Control as defined in Section 409A of the Code and any regulations and other guidance in effect from time to time thereunder, including without limitation, Notice 2005-1.

5.Additional Vesting Rules; Forfeiture.

(a)Notwithstanding the vesting provision contained in Section 3 above, but subject to the other terms and conditions set forth herein, 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 this Restricted Stock Unit Award pursuant to Section 3 or 4 hereof, this Restricted Stock Unit Award shall immediately vest, and the restrictions with respect to this Restricted Stock Unit Award shall lapse, on the date or dates and in the amount or amounts set forth in the attached Restricted Stock Unit Award Certificate 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 this Restricted Stock Unit Award 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.

2

(b)If the employment relationship of the Participant with the Corporation or any of its Affiliates is terminated other than for the reasons set forth in Section 5(a) hereof, the Participant’s rights to the unvested portion of this Restricted Stock Unit Award shall be immediately and irrevocably forfeited, unless the Participant is expressly entitled to retain the unvested portion of this Restricted Stock Unit Award or its value pursuant to an employment or severance agreement entered into on or before the Grant Date.

6.Restriction on Transfer.  This Restricted Stock Unit Award, and the right to receive Shares, may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, other than by will or the laws of descent and distribution, and no attempt to transfer this Restricted Stock Unit Award, and the right to receive 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 this Restricted Stock Unit Award or the Shares.  No transfer by will or the applicable laws of descent and distribution of this Restricted Stock Unit Award 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.

7.Issuance of Shares.  After this Restricted Stock Unit Award has vested pursuant to Section 3, 4 or 5 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 the Shares (less any Shares withheld to pay withholding taxes) 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.Adjustments.  If any portion of this Restricted Stock Unit Award vests subsequent to any change in the number or character of the Common Shares (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 portion of this Restricted Stock Unit Award had vested prior to the event changing the number or character of the outstanding Common Shares.

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 this Restricted Stock Unit Award, the receipt of Shares upon any vesting of this Restricted Stock Unit Award, the subsequent disposition of the Shares and 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 Participant’s sole and absolute responsibility, are withheld or collected from the Participant.

3

(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 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 the employer’s minimum statutory withholding requirements.  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 Participant’s employment at any time.

(b)The Participant shall not have any rights of a holder of Common Shares unless and until Shares are actually issued to the Participant as provided in this Agreement.

(c)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.

(d)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.

(e)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.

(f)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.

(g)THIS RESTRICTED STOCK UNIT AWARD AGREEMENT IS ATTACHED TO AND MADE A PART OF A RESTRICTED STOCK UNIT AWARD CERTIFICATE AND SHALL HAVE NO FORCE OR EFFECT UNLESS SUCH RESTRICTED STOCK UNIT AWARD CERTIFICATE IS DULY EXECUTED AND DELIVERED BY THE CORPORATION AND THE PARTICIPANT.

* * * * * * * *

4

OTTER TAIL CORPORATION

1999 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD CERTIFICATE

This certifies the Restricted Stock Unit Award, as specified below, 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 Restricted Stock Unit Award Agreement of which this Certificate is a part.

[Name and Address of the Participant]

[Social Security Number of the Participant]

You have been granted the following Award:

Grant Type:	Restricted Stock Unit Award
Number of Common Shares Subject to Award:	_________________________
Grant Date:	April 16, 2012
Vesting Date:	April 8, 2016

By the Corporation’s and your signature below, it is agreed that this Restricted Stock Unit Award is governed by the terms and conditions of the Restricted Stock Unit Award Agreement, a copy of which is attached and made a part of this document, and the Plan, a copy of which is enclosed.

OTTER TAIL CORPORATION
By:
	[Name of Authorized Officer]
	[Title]
[Name of Participant]