Exhibit 10
MINNESOTA POWER
Director Stock Plan
I. Purpose
The purpose of the Minnesota Power Director Stock Plan is to provide
ownership of the Company's stock to members of the Board of Directors in
order to improve the Company's ability to attract and retain highly qualified
individuals to serve as directors of the Company and to strengthen the
commonality of interest between directors and shareholders.
II. Definitions
When used herein, the following terms shall have the respective meanings
set forth below:
"Annual Retainer" means the annual retainer payable by the Company to
Directors (exclusive of any per meeting fees or expense reimbursements).
"Board" or "Board of Directors" means the Board of Directors of the Company.
"Committee" means a committee whose members meet the requirements of Section
IV(A) hereof, and who are appointed from time to time by the Board to
administer the Plan.
"Common Stock" means the common stock, no par value, of the Company.
"Company" means Minnesota Power & Light Company, a Minnesota corporation, and
any successor corporation.
"Director" or "Participant" means any person who is elected or appointed to
the Board of Directors of the Company and who is not an Employee.
"Effective Date" means May 9, 1995, the date as of which the Plan is approved
by the shareholders of the Company.
"Employee" means any officer or other common law employee of the Company or
of any Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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Director Stock Plan
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"Plan" means the Company's Director Stock Plan, adopted by the Board on
January 25, 1995, and approved by the shareholders on May 9, 1995, as it may
be amended from time to time.
"Plan Year" means the period commencing on the Effective Date of the Plan and
ending the next following December 31 and, thereafter, the calendar year.
"Stock Payment" means that portion of the Annual Retainer to be paid to
Directors in shares of Common Stock rather than cash for services rendered as
a Director of the Company, as provided in Section V hereof, including that
portion of the Stock Payment resulting from any election specified in Section
VI hereof.
"Subsidiary" means any corporation that is a "subsidiary corporation" of the
Company, as that term is defined in Section 424(f) of the Internal Revenue
Code of 1986, as amended.
III. Shares of Common Stock Subject to the Plan
Subject to Section VII below, the maximum aggregate number of
shares of Common Stock that may be delivered under the Plan is 250,000
shares. The Common Stock to be delivered under the Plan will be made
available from authorized but unissued shares of Common Stock, or shares of
Common Stock purchased on the open market and held by the Committee.
IV. Administration
A. The Plan will be administered by a Committee appointed by the
Board, consisting of three or more persons who are not eligible to
participate in the Plan. Members of the Committee need not be
members of the Board. The Company shall pay all costs of
administration of the Plan.
B. Subject to and not inconsistent with the express provisions of the
Plan, the Committee has and may exercise such powers and authority
of the Board as may be necessary or appropriate for the Committee to
carry out its functions under the Plan. Without limiting the
generality of the foregoing, the Committee shall have full power and
authority (i) to determine all questions of fact that may arise
under the Plan, (ii) to interpret the Plan and to make all other
determinations necessary or advisable for the administration of the
Plan, and (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including, without limitation, any
rules which the Committee determines are necessary or appropriate to
ensure that the Company and the Plan will be able to comply with all
applicable provisions of any federal, state or local law. All
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interpretations, determinations and actions by the Committee will be
final and binding upon all persons, including the Company, and the
Participants.
V. Determination of Annual Retainer and Stock Payments
A. The Board shall determine the Annual Retainer payable to all
Directors of the Company.
B. Each Director shall receive on the first business day following the
Effective Date, and on each January 31 thereafter (or on the first
business day thereafter if January 31 is not a business day) a Stock
Payment of 500 shares of Common Stock as a portion of the Annual
Retainer payable to such Director for the Plan Year in which such
date occurs. The cash portion of the Annual Retainer for such Plan
Year shall be paid to Directors at such times and in such manner as
may be determined by the Board of Directors. Directors joining the
Board during the Plan Year after January 31 will receive their Stock
Payment of 500 shares of Common Stock on the first business day
following the effective date of their election or appointment to the
Board.
C. Any Director may decline a Stock Payment for any Plan Year;
provided, however, that no cash compensation shall be paid in lieu
thereof. Any Director who declines a Stock Payment must do so in
writing prior to the performance of any services as a Director for
the Plan Year to which such Stock Payment relates.
D. No Director shall be required to forfeit or otherwise return any
shares of Common Stock issued as a Stock Payment pursuant to the
Plan (including any shares of Common Stock received as a result of
an election under Section VI) notwithstanding any change in status
of such Director which renders him ineligible to continue as a
Participant in the Plan.
VI. Election to Increase Amount of Stock Payment
For any Plan Year, a Participant may make a written election to
reduce the cash portion of the Annual Retainer by a specified dollar amount
and have such amount applied to purchase additional shares of Common Stock of
the Company. The election shall be made on a form provided by the Committee
and must be returned to the Committee no later than six months prior to the
applicable Plan Year. The election form shall state the amount by which the
Participant desires to reduce the cash portion of the Annual Retainer, which
shall be applied toward the purchase of Common Stock to be delivered on the
same date that the Stock Payment is made; provided, however, that no
fractional shares may be purchased. Cash in lieu of any fractional share
shall be paid to the
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Participant. An election shall continue in effect until changed or revoked by
the Participant. No Participant shall be allowed to change or revoke any
election for the then current year.
VII. Adjustment for Changes in Capitalization
If the outstanding shares of Common Stock of the Company are
increased, decreased, or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different shares or
other securities are distributed with respect to such shares of Common Stock
or other securities, through merger, consolidation, sale of all or
substantially all of the property of the Company, reorganization or
recapitalization, reclassification, stock dividend, stock split, reverse
stock split, combinations of shares, rights offering, distribution of assets
or other distribution with respect to such shares of Common Stock or other
securities or other change in the corporate structure or shares of Common
Stock, the number of shares to be granted annually, the maximum number of
shares and/or the kind of shares that may be issued under the Plan shall be
appropriately adjusted by the Committee. Any determination by the Committee
as to any such adjustment will be final, binding, and conclusive. The maximum
number of shares issuable under the Plan as a result of any such adjustment
shall be rounded down to the nearest whole share.
VIII. Amendment and Termination of Plan
A. The Board will have the power, in its discretion, to amend, suspend
or terminate the Plan at any time; provided, however, that no
amendment which requires shareholder approval in order for the Plan
to continue to comply with Rule 16b-3 under the Exchange Act,
including any successor to such Rule, shall be effective unless such
amendment shall be approved by the requisite vote of the
shareholders of the Company entitled to vote thereon.
B. Notwithstanding the foregoing, any provision of the Plan that
either states the amount and price of securities to be issued under
the Plan and specifies the price and timing of such issuances, or
sets forth a formula that determines the amount, price, and timing
of such issuances, shall not be amended more than once every six
months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules
thereunder.
IX. Effective Date and Duration of the Plan
The Plan will become effective upon the Effective Date, and shall
remain in effect, subject to the right of the Board of Directors to terminate
the Plan at any time pursuant to Section VIII, until all shares
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subject to the Plan have been purchased or acquired according to the Plan's
provisions.
X. Miscellaneous Provisions
A. Continuation of Directors in Same Status
Nothing in the Plan or any action taken pursuant to the Plan shall be
construed as creating or constituting evidence of any agreement or
understanding, express or implied, that the Company will retain a Director as
a director or in any other capacity for any period of time or at a particular
retainer or other rate of compensation, as conferring upon any Participant
any legal or other right to continue as a director or in any other capacity,
or as limiting, interfering with or otherwise affecting the right of the
Company to terminate a Participant in his capacity as a director or otherwise
at any time for any reason, with or without cause, and without regard to the
effect that such termination might have upon him as a Participant under the
Plan.
B. Compliance with Government Regulations
Neither the Plan nor the Company shall be obligated to issue any shares
of Common Stock pursuant to the Plan at any time unless and until all
applicable requirements imposed by any federal and state securities and other
laws, rules and regulations, by any regulatory agencies or by any stock
exchanges upon which the Common Stock may be listed have been fully met. As a
condition precedent to any issuance of shares of Common Stock and delivery of
certificates evidencing such shares pursuant to the Plan, the Board or the
Committee may require a Participant to take any such action and to make any
such covenants, agreements, and representations as the Board or the Committee,
as the case may be, in its discretion deems necessary or advisable to ensure
compliance with such requirements. The Company shall in no event be obligated
to register the shares of Common Stock deliverable under the Plan pursuant to
the Securities Act of 1933, as amended, or to qualify or register such shares
under any securities laws of any state upon their issuance under the Plan or at
any time thereafter, or to take any other action in order to cause the issuance
and delivery of such shares under the Plan or any subsequent offer, sale, or
other transfer of such shares to comply with any such law, regulation, or
requirement. Participants are responsible for complying with all applicable
federal and state securities and other laws, rules, and regulations in
connection with any offer, sale, or other transfer of the shares of Common
Stock issued under the Plan or any interest therein including, without
limitation, compliance with the registration requirements of the Securities
Act of 1933 as amended (unless an exception therefrom is available) or with
the provisions of Rule 144 promulgated thereunder, if applicable, or any
successor
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provisions. Certificates for shares of Common Stock may be legended
as the Committee shall deem appropriate.
C. Nontransferability of Rights
No Participant shall have the right to assign the right to receive any
Stock Payment or any other right or interest under the Plan, contingent or
otherwise, or to cause or permit any encumbrance, pledge, or charge of any
nature to be imposed on any such Stock Payment (prior to the issuance of stock
certificates evidencing such Stock Payment) or any such right or interest.
D. Severability
In the event that any provision of the Plan is held invalid, void, or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of the Plan.
E. Governing Law
To the extent not preempted by federal law, the Plan shall be governed
by the laws of the state of Minnesota.