Exhibit 10(p)
May 8, 1995
Edwin L. Russell
86 Buena Vista Avenue
Rumson, NJ 07760
RE: Employment Agreement
Dear Mr. Russell:
As authorized by the Board of Directors of Minnesota Power, I am
pleased to offer you employment at Minnesota Power under the financial terms
stated on the attached term sheet dated May 8, 1995. Your employment and
compensation package will be effective as of May 1, 1995.
Upon your acceptance, you will be elected to the Board of Directors of
Minnesota Power and to the office of President of Minnesota Power effective May
9, 1995. Additionally, it is the Board's intent to elect you to the offices of
President & CEO at its January 1996 meeting, and to the offices of Chairman,
President, and CEO at the Annual Directors' Meeting held in May 1996.
Please indicate your acceptance by signing below and returning the
enclosed copy of this letter to me.
Sincerely,
Arend J. Sandbulte
Arend J. Sandbulte
Attachment
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I hereby accept Minnesota Power's offer of employment under the terms
stated above and in the attached term sheet.
Edward L. Russell May 8, 1995
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Signature Date
May 8, 1995
FINANCIAL TERMS A.J.S.
ED RUSSELL E.L.R.
TITLE:
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*At inception: President. Also member, Board of Directors
*At January 1996 Board Meeting: President & CEO
*At May 1996 Annual Shareholders Meeting: Chairman, President & CEO
COMPENSATION:
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*Upon acceptance: $25,000 starting bonus
*Base pay: $300,000 annual salary
*Upon becoming President & CEO: Increase in base pay to $325,000/year
*Guaranteed bonus to be paid April 1996: $125,000 (to be reduced by any bonus
payments received from Huber for 1995 performance)
*Next base pay review May 1997 (any change to be effective on June 1): Based
on performance during 1996
*Bonus payments in April 1997 to be based on results during 1996 under approved
MP incentive plans (Annual Incentive Plan, Long-term Incentive Plan,
Results Sharing Plan, etc.) in place at beginning of 1996
BENEFITS:
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*Standard Minnesota Power programs, including flexible compensation, medical,
dental, death and disability, retirement and supplemental retirement,
SERP, etc. Following are several highlights:
*Group life insurance up to $750,000 is obtained through flex plan
funding (with evidence of insurability)
*Survivor Income Benefits (SIB), payable to spouse, equal to 50% of
base pay, less primary Social Security benefit (payable for life)
*Long-term disability equal to 100% of base in first year, then 60% of
base to age 65, then normal retirement benefit for life
*Supplemental Executive Retirement Plan (SERP): make-whole on Section
415 limits, retirement benefit resulting from highest four-year
Annual Incentive Plan awards, etc.
*Long-term Incentive: Payment prorated starting in 1995 (i.e., 25% at
the end of 1995, 50% at the end of 1996, 75% at the end of 1997,
100% at the end of 1998)
STOCK AWARD:
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*24,000 shares restricted stock
*Vesting at rate of 6,000 shares per year
*Dividends on 24,000 shares used to pay taxes
DISMISSAL:
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*24 months of base pay, to be reduced by each month of service
*Retention of any vested stock
RELOCATION:
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*Will purchase residence at appraised value if residence is not sold by
August 15, 1995. (appraised value equal to average of three independent
appraisers)
*Will provide temporary housing in Duluth until Sept. 1, 1995
*Will pay all reasonable relocation expenses