Exhibit 10(z)2
AMENDMENTS
TO THE
MINNESOTA POWER
EXECUTIVE LONG TERM INCENTIVE COMPENSATION PLAN
Set forth below are amendments to the Minnesota Power Executive Long Term
Incentive Compensation Plan (the "Plan") dated January 1, 1996, each authorized
and effective as of the date indicated:
1. Effective May 11, 1999, Section 4.1 is amended to read as follows:
Subject to Section 4.2 herein, the total number of Shares available
for grant under the Plan shall not exceed (a) two million, one hundred
thousand (2,100,000) Shares as constituted at the time of the annual
meeting of stockholders on May 14, 1996, (before the two-for-one stock
split which became effective March 2, 1999) plus (b) two million, five
hundred thousand (2,500,000) Shares as constituted at the time of the
annual meeting of stockholders on May 11, 1999, reduced by the number
of Shares as to which Options or Shares have been granted or issued
since that time. Shares may be (i) authorized but unissued Shares of
common stock, or (ii) Shares purchased on the open market. Shares
underlying lapsed or forfeited Grants, Grants that are not paid in
stock, previously acquired Shares tendered to exercise an Option or
Shares withheld in accordance with Section 16.2 to satisfy tax
withholding obligations may be re-used for other Grants. Shares
purchased on the open market shall increase the number of Shares
available for grant under the Plan.
2. Effective May 11, 1999 Section 6.1 is amended to read as follows:
GRANT OF OPTIONS. Subject to the terms and conditions of the Plan,
Options may be granted to an Eligible Employee at any time and from
time to time, as shall be determined by the Committee. The Committee
shall have complete discretion in determining the number of Shares
subject to Options granted to each participant (subject to Article 4
herein) and consistent with the provisions of the Plan, in determining
the terms and
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conditions pertaining to such Options; PROVIDED, HOWEVER, the maximum
number of Shares subject to Options which may be granted to any single
Participant during any one calendar year is three hundred thousand
(300,000). The Committee may grant ISOs, NQSOs or a combination
thereof.
3. Effective May 11, 1999, the second paragraph of Section 7.1 is amended to
read as follows:
The Committee shall have complete discretion in determining the number
of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms
and conditions pertaining to such SARs; PROVIDED, HOWEVER, the maximum
number of SARs which may be granted to any single Participant during
any one calendar year is forty thousand (40,000).
4. Effective May 11, 1999, Section 9.1 is amended to read as follows:
GRANT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. Subject to the
terms of the Plan, Performance Units and/or Performance Shares may be
granted to an Eligible Employee at any time and from time to time, as
shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of Performance Units
and/or Performance Shares granted to each Participant (subject to
Article 4 herein) and, consistent with the provisions of the Plan, in
determining the terms and conditions pertaining to such Grants;
PROVIDED, HOWEVER, the maximum payout to any single Participant with
respect to Performance Units granted in any one calendar year shall be
200% of base salary determined at the earlier of the beginning of the
Performance Period and at the time the performance goals are set by
the Committee and with respect to Performance Shares shall be forty
thousand (40,000) Shares.
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5. Effective with respect to Options exercised on or after July 1, 1999 a
second paragraph of Section 6.1 is added to read as follows:
The Committee may provide that a Participant who exercises all or part
of an Option by payment of the Option Price with already owned Shares,
shall be granted an additional Option (an "Ownership Retention
Option") for a number of Shares of stock equal to the number of Shares
tendered to exercise the previously granted Option. As determined by
the Committee, each Ownership Retention Option shall (a) have a grant
date which is the date as of which the previously granted Option is
exercised, and (b) be exercisable on the terms and condition as set by
the Committee, except that the Option Price shall be determined as of
the Ownership Retention Option grant date.
6. Effective with respect to Options exercised on or after July 1, 1999, the
third paragraph of Section 6.6 is amended to read as follows:
The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, (b) by
tendering, either by actual or constructive delivery, previously
acquired Shares having an aggregate fair market value at the time of
exercise equal to the total Option Price (provided that the Shares
which are tendered must have been held by the Participant for at least
six months prior to their tender to satisfy the Option Price), (c) by
Share withholding or (d) by a combination of (a), (b), and/or (c).
7. Effective with respect to Grants exercised on or after July 1, 1999,
Section 12 is amended to read as follows:
The Committee may permit a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would
otherwise be due such Participant by virtue of (1) the exercise of any
SAR or Option or (2) the satisfaction of any requirements or goals
with respect to any Grants. If any such deferral election is
permitted, the Committee
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shall, in its sole discretion, establish rules and procedures for such
payment deferrals.
8. Effective with respect to Grants on or after July 1, 1999, Section 18.6 is
added to read as follows:
CODE SECTION 162(m). The Committee may provide in a Grant Agreement
that, in the event Code Section 162(m), or any successor provision
relating to excessive employee remuneration, would operate to disallow
a deduction by the Company for all or part of any payment of a Grant
under the Plan, a Participant's receipt of the portion that would not
be deductible by the Company shall be deferred until the next
succeeding year or years in which the Participant's remuneration
either does not exceed the limit set forth in Code Section 162(m) or
is not subject to Code Section 162(m).
9. Effective September 1, 2000, the first paragraph of Section 1.1, is amended
to read as follows:
ESTABLISHMENT OF THE PLAN. ALLETE, Inc., a Minnesota corporation,
formerly Minnesota Power & Light Company (hereinafter referred to as
the "Company"), hereby establishes an outside incentive compensation
plan to be known as the "ALLETE Executive Long Term Incentive
Compensation Plan" (hereinafter referred to as the "Plan"), as set
forth in this document. The Plan permits the grant of nonqualified
stock options (NQSO), incentive stock options (ISO), stock
appreciation rights (SAR), restricted stock, performance units,
performance shares and other grants.
10. Effective September 1, 2000, Section 2.7 is amended to read as follows:
"COMPANY" means ALLETE, Inc., a Minnesota corporation, formerly known
as Minnesota Power & Light Company, or any successor thereto as
provided in Article 17 herein.
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11. Effective January 23, 2002, Section 2.31 is amended to read as follows:
"RETIREMENT" shall, with respect to a Participant, have the meaning
ascribed to such term in the tax qualified retirement plan maintained
by the Company or subsidiary for the benefit of such Participant. In
the event Participant is eligible for benefits under more than one
such tax qualified retirement plan, the earliest date provided under
any of said plans shall be the meaning ascribed under this Plan.
12. Effective May 14, 2002, Section 4.1 is amended to read as follows:
Subject to Section 4.2 herein, the total number of Shares available
for grant under the Plan shall not exceed (a) two million, one hundred
thousand (2,100,000) Shares as constituted at the time of the annual
meeting of stockholders on May 14, 1996 (before the two-for-one stock
split which became effective March 2, 1999), plus (b) two million,
five hundred thousand (2,500,000) Shares as constituted at the time of
the annual meeting of stockholders on May 11, 1999, plus (c) three
million (3,000,000) Shares as constituted at the time of the annual
meeting of shareholders on May 14, 2002 reduced by the number of
Shares as to which Options or Shares have been granted or exercised
since that time. Shares may be (i) authorized but unissued Shares of
common stock, or (ii) Shares purchased on the open market. Shares
underlying lapsed or forfeited Grants, Grants that are not paid in
stock, previously acquired Shares tendered to exercise an Option or
Shares withheld in accordance with Section 16.2 to satisfy tax
withholding obligations may be re-used for other Grants. Shares
purchased on the open market shall increase the number of Shares
available for grant under the Plan.
13. Effective October 16, 2002, Section 2.12 is amended to remove the words
"full time" from the definition of Employee.
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14. Effective January 22, 2003, the 2nd Paragraph of Section 6.1, which was
added to the Plan effective for Options exercised on or after July 1, 1999, is
deleted in its entirety, thereby terminating the availability of Ownership
Retention Options.
ALLETE, Inc.
formerly Minnesota Power & Light Company
By: /s/ Philip R. Halverson
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Philip R. Halverson
Corporate Secretary, Vice President
and General Counsel
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