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EXHIBIT 10(k)5
ALLETE
EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN
PERFORMANCE SHARE GRANT
<<First>>
<<Last>>
S.S.# <<SSN>>
In accordance with the terms of ALLETE's
Executive Long-Term Incentive
Compensation Plan (the "Plan"), as
determined by and through the Executive
Compensation Committee of ALLETE's Board of
Directors, ALLETE hereby grants to
you (the "Participant") Performance Shares,
as set forth below, subject to the
terms and conditions set forth in this
Grant (including Annexes A and B hereto
and all documents incorporated herein by
reference):
Number of
Performance Shares
Granted:
<<M_2004PerfShare_2_year>>
Date of Grant:
February 1, 2005
Performance
Period:
January 1, 2005 through December 31, 2007
Performance
Goals:
See Annex B
This Grant is made in accordance with the
Plan, which was approved by ALLETE's
shareholders at the 1996 Annual
Meeting.
Further terms and conditions of the Grant
are set forth in Annex A hereto and
Performance Goals are set forth in Annex B
hereto, which are integral parts of
this Grant.
All terms, provisions and conditions
applicable to the Performance Shares set
forth in the Plan and not set forth herein
are incorporated by reference. To the
extent any provision hereof is inconsistent
with a provision of the Plan, the
provisions of the Plan will govern.
IN WITNESS WHEREOF, ALLETE has caused this
Grant to be executed by its President
and Chief Executive Officer as of the date
and year first above written.
ALLETE
By:
/s/ Don Shippar
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President and Chief Executive Officer
Attachments: Annex A and Annex B
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ANNEX A
TO
ALLETE
EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN
PERFORMANCE SHARE GRANT
1. FURTHER TERMS
AND CONDITIONS OF PERFORMANCE SHARES. The Grant of
Performance Shares evidenced by the Grant
to which this is annexed is subject to
the following additional terms and
conditions:
(a) DIVIDEND EQUIVALENTS.
The Participant shall receive Dividend
Equivalents with respect to the number of
Performance Shares subject to the
Grant. Dividend Equivalents shall be
calculated and credited to the Participant
at the end of the Performance Period. The
Dividend Equivalents shall be in the
form of additional Performance Shares,
which shall be added to the number of
Performance Shares subject to the Grant,
and which shall equal the number of
Shares (including fractional Shares) that
could be purchased on the dividend
payment dates, based on the closing sale
price as reported in the consolidated
transaction reporting system on that date,
with cash dividends that would have
been paid on Performance Shares, if such
Performance Shares were Shares.
(b) SATISFACTION OF GOALS.
At the end of the Performance Period, the
Executive Compensation Committee (the
"Committee") shall determine the extent to
which the Performance Goals have been met.
The Participant will not be credited
with any Performance Shares if the
threshold level has not been met. Subject to
the provisions of subsection (d) hereof and
to provisions in the Plan for change
in control, percentages of the Performance
Share grant shall be credited to the
Participant as follows: If the threshold
level has been met, 50% of the
Performance Shares (as increased by the
Dividend Equivalents) shall be credited
to the Participant. If the target level has
been met, 100% of the Performance
Shares (as increased by the Dividend
Equivalents) shall be credited to the
Participant. If the superior level has been
met, 200% of the Performance Shares
(as increased by the Dividend Equivalents)
shall be credited to the Participant.
Straight line interpolation will be used to
determine earned awards based on
achievement of goals between the threshold,
target and superior levels.
(c) PAYMENT. Subject to
the provisions of subsection (d) he
