Document:

<PAGE>
                                                                  EXHIBIT 10(a)1

                     ALLETE EXECUTIVE ANNUAL INCENTIVE PLAN
                                  FORM OF AWARD
      [ELIGIBLE EXECUTIVES EXCLUDING PRESIDENT OF ALLETE PROPERTIES, INC.]

<TABLE>
                            TARGET AWARD OPPORTUNITY
                            ------------------------
<CAPTION>

<S>                                                     <C>
Base Salary                                                 $
                                                        x
Award Opportunity (percent of base salary)                  %
                                                            -----------
                                                        =
Target Award                                                $

</TABLE>

                                      GOALS
                                      -----

                           See attached goal sheet(s)

<TABLE>
                      PERFORMANCE LEVELS AND AWARD AMOUNTS
                      ------------------------------------
<CAPTION>

---------------------------------------------------------------------------------------------------------
      PERFORMANCE LEVEL                  PAYOUT AS PERCENT OF                   AWARD AMOUNT <F1>
                                             TARGET AWARD
---------------------------------------------------------------------------------------------------------
<S>                                      <C>                                    <C>
Superior                                         200%                                  $
---------------------------------------------------------------------------------------------------------
Target                                           100%                                  $
---------------------------------------------------------------------------------------------------------
Threshold                                         50%                                  $
---------------------------------------------------------------------------------------------------------
Below Threshold                                   0%                                   $
---------------------------------------------------------------------------------------------------------
<FN>
 <F1>Award amounts will be modified 80% to 120% based on the accomplishment of
                              non-financial goals.
</FN>
</TABLE>

<PAGE>

                     ALLETE EXECUTIVE ANNUAL INCENTIVE PLAN
                                  FORM OF AWARD
                      PRESIDENT OF ALLETE PROPERTIES, INC.

<TABLE>
                2005 FINANCIAL GOALS AND TARGET AWARD OPPORTUNITY
                -------------------------------------------------
<CAPTION>

<S>                                                     <C>
Budgeted Net Sales                                          $
                                                        x
Percent of Net Sales                                        %
                                                            -----------
                                                        =
Sales Award (capped)                                        $

         PLUS

Brokerage Revenue                                           $
                                                        x
Percent of Brokerage Revenue                                %
                                                            -----------
                                                        =
Brokerage Award (uncapped)                                  $

Total Target Award (Sales plus Brokerage) <F1>              $

<FN>
  <F1>Award amount will be modified 80% to 120% based on the accomplishment of
 non-financial goals including maximizing the value of properties and successful
      implementation of the business strategy for ALLETE Properties, Inc.
</FN>
</TABLE><PAGE>
                                                                  EXHIBIT 10(a)2

                     ALLETE EXECUTIVE ANNUAL INCENTIVE PLAN
                                   2005 GOALS

For all eligible participants except for the President of ALLETE Properties,
Inc., 2005 financial performance measures include a 25% weighting on
consolidated Net Income from Continuing Operations (NICO) and Operating Free
Cash Flow (OFCF) and a 75% weighting on NICO and OFCF excluding real estate
operations. Nonfinancial goals include safety, environmental, customer service
and reliability, and business support.<PAGE>
                                                                   EXHIBIT 10(b)

              AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
              ---------------------------------------------------
                            Effective January 1, 2005

         WHEREAS, ALLETE, Inc. (the "Company") maintains the ALLETE Supplemental
Executive Retirement Plan (the "SERP" or "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 SERP 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  SERP")  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  bonuses  earned by the SERP  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
bonuses,  2005 bonuses,  and 2005 salary subject to deferral  elections for SERP
participants who do not revoke their elections to defer such compensation; and

         WHEREAS, it is therefore desirable to amend the SERP (1) to reflect the
cessation  of further  deferrals  thereunder  after  2004;  (2) to provide  SERP
participants  with the opportunity to revoke their deferral  elections for their
2004  bonuses and 2005  salary and make new  deferral  elections  for their 2005
bonuses;  and (3) to the  extent  that any such  deferral  elections  are not so
revoked,  to redirect  the  deferral of 2004  deferred  bonuses,  2005  deferred
salary, and 2005 deferred bonuses to a new SERP.

         NOW,  THEREFORE, effective  as  of  January 1, 2005, the SERP is hereby
amended as follows:

  1.     Article 4 of the  SERP is  hereby amended by adding  the following  new
         sections 4.16 and 4.17 to the end thereof:

<PAGE>

         4.16     CESSATION OF DEFERRALS.

         Notwithstanding any other Plan provision to the contrary,  no amount of
         Annual  Makeup  Award,  Salary  Deferral,  Bonus  Deferral,   Severance
         Deferral,  Non-qualified  Stock  Option Gain  Deferral,  or  Retirement
         Benefit (collectively "Deferral") earned for services performed in Plan
         years  beginning  after  December 31, 2004 shall be deferred under this
         Plan.  Accordingly,  any election to make any Deferral  under this plan
         shall  terminate  as to future  Deferrals  as of December  31, 2004 and
         shall no longer  have any force or effect  under this Plan.  Subject to
         Section  4.17  hereof,  Bonus  Deferrals  that were  earned in 2004 and
         Deferrals  earned in 2005,  in each case,  that are subject to Deferral
         elections made under the terms of this Plan shall not be credited under
         this Plan, but shall be credited under a new plan to be adopted in 2005
         (a "New SERP") in  accordance  with the terms of the New SERP and shall
         be subject  to the terms and  conditions  of such New SERP,  including,
         without  limitation,  its  distribution  provisions.  No  new  Deferral
         elections  shall be made under this  Article 4 with  respect to amounts
         earned after December 31, 2004.  Investment earnings (and losses) shall
         continue to be credited (or debited) to each  participant's EDA account
         as provided in this Article 4.

         4.17     OPPORTUNITY TO REVOKE ELECTION.

         Notwithstanding  anything  contained  herein to the  contrary,  (i) any
         Participant  who  elected a 2004 Bonus  Deferral  may revoke his or her
         election  in its  entirety;  (ii) any  Participant  who  elected a 2005
         Salary  Deferral  may  revoke  his or her  election  in  part or in its
         entirety;  and (iii) any  Participant who elected a 2005 Bonus Deferral
         may file a new  deferral  election  with  respect  to such  2005  Bonus
         Deferral,  in  each  case  as  provided  in  this  Section  4.17.  Such
         revocation  election  with respect to 2004 Bonus  Deferral  and/or 2005
         Salary  Deferral or new  deferral  election  with respect to 2005 Bonus
         Deferral must be in writing on a form provided by the administrator and
         must be filed with the administrator on or before January 28, 2005. Any
         participant  who  revokes  his or her 2004 Bonus  Deferral  Election as
         provided  herein shall  receive such bonus in cash at or about the same
         time that such award is paid to other  employees  of the  Company.  Any
         Participant who revokes his or her 2005 Salary Deferral will be paid in
         accordance with the Company's standard payroll practices.

IN  WITNESS WHEREOF, ALLETE, Inc. has caused  this instrument to be  executed by
its duly authorized officers.

                                       ALLETE, Inc.
                                       /s/ Donald J. Shippar
                                       -------------------------------------
                                       Donald J. Shippar
                                       President and Chief Executive Officer

ATTEST:

/s/ Deborah A. Amberg
-------------------------------
Deborah A. Amberg
Vice President, General Counsel
and Secretary

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