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EXHIBIT 10(c)
AMENDMENT TO ALLETE DIRECTOR COMPENSATION DEFERRAL PLAN
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Effective January 1,
2005
WHEREAS, ALLETE, Inc. (the "Company") maintains the ALLETE Director
Compensation Deferral Plan (the "Plan");
and
WHEREAS, the American Jobs Creation Act of 2004 added a new section
409A to the Internal Revenue Code
establishing new rules
regarding the taxation
of non-qualified deferred compensation plans, effective for amounts deferred
after December 31, 2004 (the "New Law");
and
WHEREAS, under the new
law, amounts deferred
on and after January
1,
2005 under the Plan would be immediately
taxable to participants; and
WHEREAS, the Executive Compensation Committee of the Board of
Directors
of the Company has instructed management to prepare a new
deferred compensation
plan (a "New Plan") that will comply with the New Law to be
adopted by the
Company no later than December 31, 2005;
and
WHEREAS, recent
guidance issued by the Internal Revenue Service
specifies that amounts earned by Plan
participants
in 2004 that become
payable
in 2005 will, if subject to a deferral
election, be treated
as amounts deferred
after December 31, 2004 for purposes of the
New Law; and
WHEREAS, such recent guidance also allows deferred compensation plans
to be amended to give participants the opportunity to revoke,
in whole or in
part, certain outstanding elections to
defer compensation; and
WHEREAS, such recent
guidance also
allows participants to elect to
defer certain performance-based
compensation based on
services performed over a
period of at least 12 months no later than 6 months before the end of that
period; and
WHEREAS, it is
desirable to preserve
the deferral of
taxes on 2004
compensation (which is payable in 2005), and 2005 compensation subject to
deferral elections for Plan participants who do not revoke their elections
to
defer such compensation; and
WHEREAS, it is therefore desirable to amend the Plan (1) to reflect
the
cessation of further deferrals thereunder after 2004; (2) to provide Plan
participants with the opportunity to revoke
their deferral
elections for their
2004 compensation (which is
