RAVEN INDUSTRIES, Inc. RESTRICTED STOCK UNIT Agreement (Performance Based Vesting) (Fiscal 2013-2015 Awards)

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) made effective as of April 2, 2012, is by and between Raven Industries, Inc., a South Dakota corporation (the “Company”), and ______________________ (the “Employee”).

A.     The Company has adopted the Raven Industries, Inc. 2010 Stock Incentive Plan, as amended and restated in 2012 (the “Plan”), to increase shareholder value and to advance the interests of the Company by furnishing a variety of economic incentives designed to attract, retain and motivate employees.

A.The Personnel & Compensation Committee of the Board of Directors of the Company (the “Committee”) believes that entering into this Agreement with Employee is consistent with the stated purposes for which the Plan was adopted.

B.The Company desires to grant restricted stock units to the Employee, and the Employee desires to accept such restricted stock units, on the terms and conditions set forth herein and in the Plan.

C.The restricted stock units granted pursuant to this Agreement shall vest based on the attainment of performance goals related to the Company's average return on sales and continued employment of the Employee during a three-year period after the effective date of this Agreement.

D.The terms of this Agreement are intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) as a “short-term deferral” of compensation. Code Section 409A and the Treasury Regulations issued thereunder are referred to in this Agreement as “Section 409A.”

1.Grant of Performance Based Restricted Stock Units. Subject to the terms and provisions of this Agreement and the Plan, the Company hereby grants to Employee an award of restricted stock units (the “Units”) with a Target Award as set forth in Exhibit A. The number of Units which may finally vest, and the number of shares that may be paid out pursuant to this award, (i) is contingent upon the Company achieving the performance objectives set forth in Exhibit A; and (ii) is subject to the other terms and conditions and contingencies set forth in such Exhibit and in the Plan. The Company shall establish a bookkeeping account for the Employee (the “Unit Account”) and shall credit the Units identified in this Section 1 to the Unit Account.

2.Dividend Equivalents. The Employee will be credited with the Dividend Equivalents (as that term is defined in the Plan) on the Units which vest pursuant to Section 3, in an amount equal to the dividends that would have been paid on the equivalent number of shares of common stock during the three-year performance period. The Dividend Equivalents shall be credited in the form of additional Units prior to settlement pursuant to Section 4.

    

4.    Form and Timing of Payment. As soon as administratively practicable following the Vesting Date identified in Section 3, but no later than thirty days (30) thereafter, the Company shall pay to the Employee one share of the Company's common stock for each vested Unit granted under this Agreement, including Units credited for Dividend Equivalents pursuant to Section 2. Fractional Units shall be rounded to the nearest whole Unit. In the event of a Change in Control, settlement shall occur as soon as reasonably practicable following the Change in Control, but no later than the later of the calendar year in which occurs the Change in Control, or, if later, two and one-half months after the Change in Control. Except as specifically permitted under Section 409A, neither the Company (or the Board of Directors) nor Employee (or any Beneficiary) shall have the right to have any of the shares delivered before or after the time they are otherwise scheduled to be delivered under this Agreement.

5.    No Right to Continuation of Employment or Corporate Assets. Nothing contained in this Agreement shall be deemed to grant Employee any right to continue in the employ of the Company for any period of time or to any right to continue his or her present or any other rate of compensation, nor shall this Agreement be construed as giving Employee, Employee's beneficiaries or any other person any equity or interests of any kind in the assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and any such person.

6.    Withholding of Tax. To the extent that the receipt of Units or common stock, or the lapse of any restrictions thereon, results in income to Employee for federal or state income tax purposes, Employee shall pay the applicable withholding tax, which may be paid by any method permitted under the Plan.

7.    No Assignment of Units or Rights to Shares. Neither Employee nor any Beneficiary shall have any right to assign, pledge or otherwise transfer any Units or any right to receive shares under this Agreement, except to the limited extent permitted under the Plan. No creditor of Employee (or of any Beneficiary) shall have any right to garnish or otherwise attach any Units or any right to receive shares under this Agreement. In the event of any attempted assignment, pledge or other transfer, or attempted garnishment or attachment by a creditor, the Company shall have no further liability under this Agreement.

8.    Rights of Employee. Employee shall not have any of the rights of a shareholder with respect to the Units.

9.    Grant Subject to Shareholder Approval of Restatement of the Plan. The Company's Board of Directors has approved the amendment and restatement of the Plan that includes, without limitation, expanding the type of incentives that may be granted under the Plan to include restricted stock units (the “Plan Amendment”). The Company intends to submit a proposal (the “Proposal”) to its shareholders at its 2012 annual shareholders meeting (the “Annual Meeting”) to approve the Plan Amendment. Notwithstanding any provision to the contrary contained in this Agreement, the Company's grant of the Units hereunder is subject in all respects to receipt of shareholder approval for the Proposal at the Annual Meeting or any adjournment thereof. In the event the Proposal is not approved by the Company's shareholders at the Annual Meeting or any adjournment thereof, the grant of Units pursuant to this Agreement shall be null and void and this Agreement shall have no further force or effect.

10.    Forfeiture Remedy in the Event of Restatement of Financial Statements (Applicable Only to Officers). If any of the Company's financial statements during the period of this Agreement are subsequently required to be restated due to material noncompliance with any financial reporting requirement under applicable securities laws, then the Board of Directors of the Company (the “Board”) may, in its sole discretion, require forfeiture or repayment of the compensation received by Employee under this Agreement within the three year period preceding the date of the restatement, that the Board determines would not have been received had the financial statements been initially filed as restated. The Board may effect this remedy (a) through forfeiture or cancellation of the Units that the Board determines would not have been granted to Employee if the financial statements had been initially filed as restated, (b) by seeking repayment from Employee in cash of the value of such Shares at the time of the Board's determination, (c) by seeking repayment of the gross amount realized by Employee upon sale of common stock paid upon vesting of such Units, or (d) by any other means deemed appropriate by the Board, in its sole discretion. In the event the Company adopts a policy that requires its executive officers to forfeit or repay compensation in the event of a restatement of the financial statements, Employee agrees that such policy shall apply to this award and shall be incorporated into this Agreement.

11.    The Plan; Administration. The Units are granted pursuant to the Plan (including without limitation Section 8 thereof) and is governed by the terms thereof, which are incorporated herein by reference. The Committee shall have the sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the Committee with respect thereto and to this Agreement shall be final and binding upon Employee. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall govern and control. By the execution of this Agreement, Employee acknowledges receipt of a copy of the Plan.

12.    Further Assurances. Each party hereto agrees to execute such further papers, agreements, assignments or documents of title as may be necessary or desirable to affect the purposes of this Agreement and carry out its provisions.

13.    Governing Law. This Agreement, in its interpretation and effect, shall be governed by the laws of the State of South Dakota applicable to contracts executed and to be performed therein.

14.    Entire Agreement; Amendments. This Agreement and the Plan embody the entire agreement made between the parties hereto with respect to the matters covered herein and shall not be modified except by a writing signed by the party to be charged.

15.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute but one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the date first written above.