Executive Annual Incentive Plan

The Compensation and Human Capital Management Committee (hereinafter the “Compensation Committee”) of Otter Tail Corporation (the “Corporation”) has established the Executive Annual Incentive Plan (the “Plan”) to reward top Corporate executives (“Participants”) who are directly involved in ensuring that the Corporation reaches its performance objectives. The key objectives of the Plan are to focus the Participants’ attention on the Corporation’s operating results to ensure that the Corporation will achieve its desired results currently and in the future.

Participants include the executive officers of the Corporation as named by the President and Chief Executive Officer and approved by the Compensation Committee of the Board of Directors. Participants who terminate employment for reasons other than death, disability, retirement or transfer to a Corporation subsidiary before the end of a Plan Year will not receive payments under this Plan for the Plan Year, unless otherwise provided in the terms of any employment agreement between the Corporation and the Participant.

In the event a Participant dies, terminates employment due to 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, retires (voluntarily resigns at or after the earlier of (i) age 62 or (ii) qualifying for normal or early retirement under any retirement plan of the Corporation that is applicable to the Participant) or transfers to a subsidiary during a Plan Year, then the Participant shall be entitled to receive a payout for the Plan Year in which the termination or transfer occurs based on performance through the end of the Plan Year, prorated based on the number of days in the Plan Year up to and including the date of termination or transfer. Prorated annual incentive payments will be paid to the estates of Participants who die during a Plan Year for which a Plan payment is made, following the end of the Plan year at such time payment is made to other Plan Participants.

Base Pay is the annualized base amount paid to Participants as of December 31 of the current Plan Year or, in the case of termination or transfer during the Plan Year, the date of termination or transfer. Base Pay includes amounts deferred under Section 401(k) of the Internal Revenue Code, salary reduction amounts under Section 125 of the Internal Revenue Code, and amounts deferred under any deferred compensation program sponsored by the Corporation. Base Pay does not include incentive payments, moving expenses, expense reimbursements, imputed income or any similar amounts.

Plan Year is the calendar year.

Target Annual Incentive is the percentage of Base Pay payable if performance is achieved at the stated target level. The Target Annual Incentive levels will be set for each Participant and approved by the Compensation Committee

The Participant’s Target Annual Incentive will be based on competitive market practice, internal equity needs and the Corporation’s philosophy of pay for performance.

Earning the Target Annual Incentive payout is dependent upon achieving one or more performance goals and such other performance criteria identified for each Participant by the Compensation Committee.

Financial metrics, which account for 60-80% of a Participant’s Target Annual Incentive, are approved by the Board of Directors and have threshold, target and maximum performance levels. For financial metrics, 50% of the Target Annual Incentive payable is paid if minimum performance level is achieved; 100% of the Target Annual Incentive payable is paid if the target performance level is achieved; and 200% of the Target Annual Incentive payable is paid if the maximum performance level is achieved. For performance between the minimum performance level and the target performance level, the payment amount shall increase at an even rate; similarly, for performance between the target performance level and the maximum performance level, the payment amount shall increase at an even rate.

Individual performance and strategic goals, which account for 10-30% of a Participant’s Target Annual Incentive, are established at the beginning of the year.

Workplace safety accounts for 10% of a Participant’s Target Annual Incentive. The annual cash incentive for safety measures is paid out at 0% or 100%.

A DEI performance measure is evaluated after the annual cash incentive payout is calculated according to the above measures and can add up to 5% of Target Annual Incentive to the payout. For the DEI goal, 0% is paid if target is achieved with up to 5% of bonus target paid at maximum performance.

An environmental performance measure is evaluated after the annual incentive payout is calculated according to the above measures (besides DEI) and can add up to 5% of Target Annual Incentive to the payout. For the environmental goal, 0% is paid if target is achieved with up to 5% of bonus target paid at maximum performance.

Where more than one performance goal is identified for a Participant, weighting of the goals will be specified and approved by the Compensation Committee.

The Plan is not funded, and all annual incentive payments will be paid out of the Corporation’s general assets.

Annual incentive payments will be paid in cash, through the appropriate payroll system, as soon as administratively possible after annual performance results are approved by the Compensation Committee, but not later than March 15th. The Corporation will deduct from any Plan payment and transmit to the proper taxing authority, such amount as it may be required to withhold under any applicable federal, state or other law.

Payment under this Plan is also governed by the Executive Compensation Policy which includes a Recoupment Policy, which includes, among other provisions, that amounts paid under this Plan

are subject to recoupment if there is an accounting restatement due to the material noncompliance under any financial reporting requirements which results in performance-based compensation that would have been a lower amount if it had been calculated based on such restated results.

The Compensation Committee retains sole discretion, authority and responsibility to decide all factual and legal questions under the Plan.

The terms of this document shall not constitute a term of employment for any Participant, and the Corporation shall not be obligated to continue the Plan. The terms of this document shall not give any Participant the right to be retained in employment with the Corporation.

Payments under this Plan are not considered part of base pay and, except for contributions to the Corporation’s Retirement Savings Plan, will not be considered in any Corporation or subsidiary ‑tax qualified Participant benefit plan. Payments under this Plan will be considered part of Recognized Compensation under the Otter Tail Corporation Retirement Savings Plan, or its successor, and will, therefore, be included in determining the Participant’s Retirement Savings Plan contributions.

The Plan’s performance goals and payment structure will be reviewed annually and adjusted to reflect current market conditions and Corporation’s needs. The Corporation, by action of the Compensation Committee of the Board of Directors, reserves the right to amend or terminate this Plan at any time.