ALLETE Executive Long-Term Incentive Compensation Plan – 2006 Cash Incentive Award for President of ALLETE Properties, LLC

Summary

This agreement outlines the terms of a long-term cash incentive award for the President of ALLETE Properties, LLC under ALLETE's Executive Long-Term Incentive Compensation Plan for 2006. The award amount is based on a percentage of the executive's base salary and is determined by achievement of specific financial and strategic goals. The final cash award is subject to a performance scorecard and will vest in installments over three years, with payments scheduled in 2007, 2008, and 2009.

EX-10.A.3 4 exhibit10a3.txt FORM OF EXECUTIVE LT INCENTIVE COMP PLAN 2006 CASH INCENTIVE AWARD-ALLETE PROPERTIES PRESIDENT Exhibit 10(a)3 ALLETE EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PLAN FORM OF LONG-TERM CASH INCENTIVE AWARD PRESIDENT OF ALLETE PROPERTIES, LLC 2006 GOALS AND AWARD OPPORTUNITY -------------------------------- Base Salary $ TIMES Award Opportunity (percent of base salary) % ------ EQUALS Target Award Opportunity $ TIMES Performance Scorecard Achievement (0% - 120%) /1 EQUALS Cash Incentive Award /2 $ ------- /1 The Performance Scorecard includes one financial goal and six strategic nonfinanical goals. Goal achievement will be determined at the end of 2006. /2 Award Vesting: 30% on February 1, 2007; 30% on February 1, 2008; 40% on February 1, 2009.