Exhibit 10.1

 

ECOLAB INC.

2010 STOCK INCENTIVE PLAN

(Amended and restated effective May 2, 2013)

 

1.                                      Purpose of Plan.

 

The purpose of the Ecolab Inc. 2010 Stock Incentive Plan (the “Plan”) is to
advance the interests of Ecolab Inc. (the “Company”) and its stockholders by
enabling the Company and its Subsidiaries to attract and retain qualified
individuals through opportunities for equity participation in the Company, and
to reward those individuals who contribute to the achievement of the Company’
economic objectives.

 

2.                                      Definitions.

 

The following terms will have the meanings set forth below, unless the context
clearly otherwise requires:

 

2.1                               “Board” means the Board of Directors of the
Company.

 

2.2                               “Broker Exercise Notice” means a written
notice pursuant to which a Participant, upon exercise of an Option, irrevocably
instructs a broker or dealer to sell a sufficient number of shares or loan a
sufficient amount of money to pay all or a portion of the exercise price of the
Option and/or any related withholding tax obligations and remit such sums to the
Company and directs the Company to deliver stock certificates to be issued upon
such exercise directly to such broker or dealer or their nominee.

 

2.3                               “Cause” means (i) dishonesty, fraud,
misrepresentation, embezzlement or deliberate injury or attempted injury, in
each case related to the Company or any Subsidiary, (ii) any unlawful or
criminal activity of a serious nature, (iii) any intentional and deliberate
breach of a duty or duties that, individually or in the aggregate, are material
in relation to the Participant’s overall duties, or (iv) any material breach of
any confidentiality or noncompete agreement entered into with the Company or any
Subsidiary.

 

2.4                               “Change in Control” means an event described
in Section 14.1 of the Plan; provided, however, if an Incentive Award
constitutes a deferral of compensation subject to Section 409A of the Code, and
if that Incentive Award provides for a change in the time or form of payment
upon a Change in Control, then no Change in Control shall be deemed to have
occurred upon an event described in Section 14.1 of the Plan unless the event
would also constitute, under Section 409A of the Code and the regulations and
rulings issued thereunder, either a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the
Company.

 

2.5                               “Code” means the Internal Revenue Code of
1986, as amended.

 

2.6                               “Committee” means the group of individuals
administering the Plan, as provided in Section 3 of the Plan.

 

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2.7                               “Common Stock” means the common stock of the
Company, par value $1.00 per share, or the number and kind of shares of stock or
other securities into which such Common Stock may be changed in accordance with
Section 4.3 of the Plan.

 

2.8                               “Covered Employee” means a person who is, or
is determined by the Committee to likely become, a “covered employee” (as
defined in Section 162(m)(3) of the Code).

 

2.9                               “Disability” means the disability of the
Participant such as would entitle the Participant to receive disability income
benefits pursuant to the long-term disability plan of the Company or Subsidiary
then covering the Participant or, if no such plan exists or is applicable to the
Participant, the permanent and total disability of the Participant in the sense
that he or she is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months; provided, however, if distribution
of an Incentive Award subject to Section 409A of the Code is or can be triggered
by an Eligible Recipient’s Disability, such term will mean that the Eligible
Recipient is disabled as defined by Section 409A of the Code and the regulations
and rulings issued thereunder.

 

2.10                        “Eligible Recipients” means all employees
(including, without limitation, officers and directors who are also employees)
of the Company or any Subsidiary, all Non-Employee Directors and any
consultants, advisors and independent contractors of the Company or any
Subsidiary that would be included within the definition of “employee” in General
Instruction A to Form S-8 under the Securities Act.

 

2.11                        “Exchange Act” means the Securities Exchange Act of
1934, as amended.

 

2.12                        “Fair Market Value” means, with respect to the
Common Stock, as of any date (or, if no shares were traded or quoted on such
date, as of the next preceding date on which there was such a trade or quote)
the mean between the reported high and low sale prices of the Common Stock
during the regular daily trading session, as quoted in the WALL STREET JOURNAL
reports of the New York Stock Exchange - Composite Quotations.

 

2.13                        “Good Reason” means, without the express written
consent of the affected Participant, any of the following events involving the
Company or Subsidiary that employs or receives services from the Participant:

 

(a)                                 the assignment to the Participant of any
duties inconsistent in any substantial respect with the Participant’s position,
authority or responsibilities as in effect during the 90-day period immediately
preceding the Change in Control which assignment results in a substantial
diminution in such position, authority or responsibilities or any other
substantial adverse change in such position (including titles), authority or
responsibilities, excluding an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company or applicable
Subsidiary as set forth below;

 

(b)                                 any failure by the Company or applicable
Subsidiary to furnish the Participant with compensation and benefits at a level
substantially equal to or exceeding those received by the Participant from the
Company or applicable Subsidiary during the

 

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90-day period preceding the Change in Control, other than (i) an insubstantial
and inadvertent failure remedied by the Company or applicable Subsidiary as set
forth below, (ii) a reduction in compensation which is applied to all non-union
employees of the Company or applicable Subsidiary in the same dollar amount or
percentage, or (iii) a reduction or modification of any employee benefit program
covering substantially all of the employees of the Company or applicable
Subsidiary, which reduction or modification generally applies to all employees
covered under such program; or

 

(c)                                  the Company or applicable Subsidiary
requiring the Participant to be based or to perform services at any office or
location that is in excess of 50 miles from the principal location of the
Participant’s work during the 90-day period immediately preceding the Change in
Control, except for travel reasonably required in the performance of the
Participant’s responsibilities.

 

Before a termination by the Participant under this Section 2.13 will constitute
termination for Good Reason, the Participant must give the Company a notice of
termination within 30 calendar days of the occurrence of the event that
constitutes Good Reason.  The notice must set forth in reasonable detail the
specific reason for the termination and the facts and circumstances claimed to
provide a basis for termination of employment under the provision indicated. 
Failure to provide such notice within such 30-day period shall be conclusive
proof that the Participant does not have Good Reason to terminate employment.

 

For purposes of this Section 2.13, Good Reason shall exist only if the Company
or applicable Subsidiary fails to remedy the event or events constituting Good
Reason within 30 calendar days after receipt of the notice of termination from
the Participant.  If the Participant determines Good Reason for termination
exists and timely files a notice of termination, such determination shall be
presumed to be true and the Company will have the burden of proving that Good
Reason does not exist.

 

2.14                        “Incentive Award” means an Option, Stock
Appreciation Right, Restricted Stock Award, Stock Unit Award or Performance
Award granted to an Eligible Recipient pursuant to the Plan.

 

2.15                        “Incentive Stock Option” means a right to purchase
Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan
that qualifies as an “incentive stock option” within the meaning of Section 422
of the Code.

 

2.16                        “Non-Employee Director” means a member of the Board
who is not an employee of the Company or any Subsidiary.

 

2.17                        “Non-Statutory Stock Option” means a right to
purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of
the Plan that does not qualify as an Incentive Stock Option.

 

2.18                        “Option” means an Incentive Stock Option or a
Non-Statutory Stock Option.

 

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2.19                        “Participant” means an Eligible Recipient who
receives one or more Incentive Awards under the Plan.

 

2.20                        “Performance-Based Compensation” means an Incentive
Award to a Covered Employee that is intended to constitute “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code.  Options
and Stock Appreciation Rights granted to Covered Employees are intended to be
Performance-Based Compensation.

 

2.21                        “Performance Award” means a right granted to an
Eligible Recipient pursuant to Section 10 of the Plan to receive an amount of
cash, shares of Common Stock, or a combination of both, contingent upon
achievement of Performance Criteria or other objectives during a specified
period.

 

2.22                        “Performance Criteria” means the performance
criteria that are used by the Committee in granting Incentive Awards contingent
upon achievement of performance goals over a specified performance period.  For
any Incentive Award intended to constitute Performance-Based Compensation, the
Performance Criteria shall consist of one or a combination of two or more of the
following: net sales; operating income; net income; net income per share (basic
or diluted); earnings before or after any one or more of taxes, interest,
depreciation and amortization; profitability as measured by return ratios
(including return on invested capital, return on assets, return on equity,
return on investment and return on sales); cash flow; market share; cost
reduction goals; margins (including one or more of gross, operating and net
income margins); stock price; total return to stockholders; economic value
added; working capital and strategic plan development and implementation.  The
Committee may select one criterion or multiple criteria for measuring
performance, and the measurement may be based upon Company, Subsidiary or
business unit performance, and may be expressed in absolute amounts, on a per
share basis, as a growth rate or change from preceding periods, or by relative
comparison to the performance of other companies or any other external measure
of the selected criteria.  The Committee shall, in its sole discretion, define
in an objective fashion the manner of calculating the performance goals based on
the Performance Criteria it selects to use in any performance period, which may
include adjustments to such criteria as otherwise defined under U.S. Generally
Accepted Accounting Principles.  Subsequent references in this Plan to the
achievement or satisfaction of Performance Criteria shall be deemed to include
performance goals specified by the Committee that are based on such Performance
Criteria.

 

2.23                        “Previously Acquired Shares” means shares of Common
Stock that are already owned by the Participant.

 

2.24                        “Prior Plan” means the Ecolab Inc. 2005 Stock
Incentive Plan.

 

2.25                        “Restricted Stock Award” means an award of Common
Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan that is
subject to restrictions on transferability and a risk of forfeiture.

 

2.26                        “Retirement” means termination of employment or
service at or after age fifty-five (55) with five (5) or more years of
continuous employment or other service with the Company and any Subsidiaries.

 

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2.27                        “Securities Act” means the Securities Act of 1933,
as amended.

 

2.28                        “Stock Appreciation Right” means a right granted to
an Eligible Recipient pursuant to Section 7 of the Plan to receive a payment
from the Company, in the form of shares of Common Stock, cash or a combination
of both, equal to the difference between the Fair Market Value of one or more
shares of Common Stock and a specified exercise price of such shares.

 

2.29                        “Stock Unit Award” means a right granted to an
Eligible Recipient pursuant to Section 9 of the Plan to receive the Fair Market
Value of one or more shares of Common Stock, payable in cash, shares of Common
Stock, or a combination of both, the payment, issuance, retention and /or
vesting of which is subject to the satisfaction of specified conditions, which
may include achievement of Performance Criteria or other objectives.

 

2.30                        “Subsidiary” means any entity that is a “subsidiary
corporation,” as defined in Code Section 424(f), of the Company or any entity in
which the Company owns, directly or indirectly, at least 20% of combined voting
power of the entity’s voting securities and which is designated by the Committee
as covered by the Plan.

 

2.31                        “Substitute Award” means an Incentive Award granted
upon the assumption of, or in substitution or exchange for, outstanding awards
granted by a company or other entity acquired by the Company or any Subsidiary
or with which the Company or any Subsidiary combines.

 

2.32                        “Tax Date” means the date any withholding tax
obligation arises under the Code for a Participant with respect to an Incentive
Award.

 

3.                                      Plan Administration.

 

3.1                               The Committee.  The Plan will be administered
by the Board or by a committee of the Board.  So long as the Company has a class
of its equity securities registered under Section 12 of the Exchange Act, any
committee administering the Plan will consist solely of two or more members of
the Board who are “non-employee directors” within the meaning of Rule 16b-3
under the Exchange Act, who are “independent” as required by the listing
standards of the New York Stock Exchange and who are “outside directors” within
the meaning of Section 162(m) of the Code, but any action taken by such a
committee shall be valid and effective even if the members of such committee at
the time of such action are later determined not to have satisfied all the
requirements for membership specified above.  Such a committee, if established,
will act by majority approval of the members (unanimous approval with respect to
action by written consent), and a majority of the members of such a committee
will constitute a quorum.  As used in the Plan, “Committee” will refer to the
Board or to such a committee, if established.  To the extent consistent with
applicable corporate law of the Company’s jurisdiction of incorporation, the
Committee may delegate to one or more of its members, to any other member of the
Board or to any officers of the Company the duties, power and authority of the
Committee under the Plan pursuant to such conditions or limitations as the
Committee may establish; provided, however, that only the Committee may exercise
such duties, power and authority with respect to Eligible Recipients who are
subject to Section 16 of the Exchange Act or whose compensation in the

 

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fiscal year may be subject to the limits on deductible compensation pursuant to
Section 162(m) of the Code.  The Committee may also delegate to one or more
agents or advisors such non-discretionary administrative duties or powers as it
deems advisable.  The Committee may exercise its duties, power and authority
under the Plan in its sole and absolute discretion without the consent of any
Participant or other party, unless the Plan specifically provides otherwise. 
Each determination, interpretation or other action made or taken by the
Committee pursuant to the provisions of the Plan will be conclusive and binding
for all purposes and on all persons, and no member of the Committee will be
liable for any action or determination made in good faith with respect to the
Plan or any Incentive Award granted under the Plan.

 

3.2                               Authority of the Committee.

 

(a)                                 In accordance with and subject to the
provisions of the Plan, the Committee will have the authority to determine all
provisions of Incentive Awards as the Committee may deem necessary or desirable
and as consistent with the terms of the Plan, including, without limitation, the
following:  (i) the Eligible Recipients to be selected as Participants; (ii) the
nature and extent of the Incentive Awards to be made to each Participant
(including the number of shares of Common Stock to be subject to each Incentive
Award, any exercise price, the manner in which Incentive Awards will vest or
become exercisable and whether Incentive Awards will be granted in tandem with
other Incentive Awards) and the form of written or electronic agreement, if any,
evidencing such Incentive Award; (iii) the time or times when Incentive Awards
will be granted; (iv) the duration of each Incentive Award; and (v) the
restrictions and other conditions to which the payment or vesting of Incentive
Awards may be subject.  In addition, the Committee will have the authority under
the Plan in its sole discretion to (A) establish, amend or rescind rules to
administer the Plan; (B) interpret the Plan and any Incentive Award or related
agreement made under the Plan; (C) make all other determinations necessary or
desirable for the administration of the Plan; and (D) pay the intrinsic value of
any Incentive Award in the form of cash, Common Stock or any combination of
both.

 

(b)                                 Subject to Section 3.2(d) below, the
Committee will have the authority under the Plan to amend or modify the terms of
any outstanding Incentive Award in any manner, including, without limitation,
the authority to modify the number of shares or other terms and conditions of an
Incentive Award, extend the term of an Incentive Award, accelerate the
exercisability or vesting or otherwise terminate any restrictions relating to an
Incentive Award, accept the surrender of any outstanding Incentive Award or, to
the extent not previously exercised or vested, authorize the grant of new
Incentive Awards in substitution for surrendered Incentive Awards; provided,
however that (i) the amended or modified terms are permitted by the Plan as then
in effect; (ii) any Participant adversely affected by such amended or modified
terms shall have consented to such amendment or modification unless such
amendment is necessary to comply with applicable law or stock exchange rules;
and (iii) the authority to accelerate the exercisability or vesting or otherwise
terminate restrictions relating to an Incentive Award may be exercised only in
connection with a Participant’s death, Disability or Retirement, in connection
with a Change in Control, or to the extent such actions involve an aggregate
number of shares of Common Stock not in excess of 5% of the number of shares
available for Incentive Awards under the first sentence of Section 4.1.

 

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(c)                                  In the event of (i) any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, extraordinary
dividend or divestiture (including a spin-off) or any other change in corporate
structure or shares; (ii) any purchase, acquisition, sale, disposition or
write-down of a significant amount of assets or a significant business;
(iii) any change in accounting principles or practices, tax laws or other such
laws or provisions affecting reported results; (iv) any uninsured catastrophic
losses or extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 or in management’s discussion and analysis of
financial performance appearing in the Company’s annual report to stockholders
for the applicable year; or (v) any other similar change, in each case with
respect to the Company or any other entity whose performance is relevant to the
grant or vesting of an Incentive Award, the Committee (or, if the Company is not
the surviving corporation in any such transaction, the board of directors of the
surviving corporation) may, without the consent of any affected Participant,
amend or modify the vesting criteria (including Performance Criteria and related
performance goals) of any outstanding Incentive Award that is based in whole or
in part on the financial performance of the Company (or any Subsidiary or
division or other subunit thereof) or such other entity so as equitably to
reflect such event, with the desired result that the criteria for evaluating
such financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the board of
directors of the surviving corporation) following such event as prior to such
event; provided, however, that (A) the amended or modified terms are permitted
by the Plan as then in effect and (B) with respect to any Incentive Award
intended to qualify as Performance-Based Compensation, any such amendment or
modification would not result in such Incentive Award failing to qualify as
“performance-based compensation” for purposes of Section 162(m) of the Code.

 

(d)                                 Notwithstanding any other provision of this
Plan other than Section 4.3, the Committee may not, without prior approval of
the Company’s stockholders, seek to effect any re-pricing of any previously
granted, “underwater” Option or Stock Appreciation Right by:  (i) amending or
modifying the terms of the Option or Stock Appreciation Right to lower the
exercise price; (ii) canceling the underwater Option or Stock Appreciation Right
and granting either (A) replacement Options or Stock Appreciation Rights having
a lower exercise price; (B) Restricted Stock Awards; or (C) Stock Unit Awards or
Performance Awards in exchange; or (iii) repurchasing the underwater Options or
Stock Appreciation Rights.  For purposes of this Section 3.2(d), an Option or
Stock Appreciation Right will be deemed to be “underwater” at any time when the
Fair Market Value of the Common Stock is less than the exercise price of the
Option or the Stock Appreciation Right.

 

(e)                                  In addition to the authority of the
Committee under Section 3.2(b) and notwithstanding any other provision of the
Plan, the Committee may, in its sole discretion, amend the terms of the Plan or
Incentive Awards with respect to Participants resident outside of the United
States or employed by a non-U.S. Subsidiary in order to comply with local legal
requirements, to otherwise protect the Company’s or Subsidiary’s interests, or
to meet objectives of the Plan, and may, where appropriate, establish one or
more sub-plans (including the adoption of any required rules and regulations)
for the

 

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purposes of qualifying for preferred tax treatment under foreign tax laws.  The
Committee shall have no authority, however, to take action pursuant to this
Section 3.2(e): (i) to reserve shares or grant Incentive Awards in excess of the
limitations provided in Section 4.1; (ii) to effect any re-pricing in violation
of Section 3.2(d); (iii) to grant Options having an exercise price less than
100% of the Fair Market Value of one share of Common Stock on the date of grant
in violation of Section 6.2; or (iv) for which stockholder approval would then
be required pursuant to Section 422 of the Code or Section 162(m) of the Code or
the rules of the New York Stock Exchange.

 

(f)                                   Notwithstanding anything in this Plan to
the contrary, the Committee will determine whether an Incentive Award is subject
to the requirements of Section 409A of the Code and, if determined to be subject
to Section 409A of the Code, the Committee will make such Incentive Award
subject to such written terms and conditions determined necessary or desirable
to cause such Incentive Award to comply in form with the requirements of
Section 409A of the Code.  Further, the Plan, as it relates to Incentive Awards
that are subject to Section 409A of the Code, will be administered in a manner
that is intended to comply with the requirements of Section 409A of the Code and
any regulations or rulings issued thereunder.

 

4.                                      Shares Available for Issuance.

 

4.1                               Maximum Number of Shares Available; Certain
Restrictions on Awards.  Subject to Section 4.2 and to adjustment as provided in
Section 4.3 of the Plan, the maximum number of shares of Common Stock that will
be available for issuance under the Plan will be 29,000,000, plus any Shares of
Common Stock remaining available for future grants under the Prior Plan on the
original effective date of this Plan.  The shares available for issuance under
the Plan may, at the election of the Committee, be either treasury shares or
shares authorized but unissued, and, if treasury shares are used, all references
in the Plan to the issuance of shares will, for corporate law purposes, be
deemed to mean the transfer of shares from treasury.  Notwithstanding any other
provisions of the Plan to the contrary, (i) no Participant in the Plan may be
granted Incentive Awards of Options and Stock Appreciation Rights involving more
than 1,000,000 shares of Common Stock in the aggregate during any calendar year;
(ii) no Participant in the Plan may be granted Incentive Awards other than
Options and Stock Appreciation Rights that are denominated in shares of Common
Stock and involve more than 1,000,000 shares of Common Stock in the aggregate
during any calendar year; (ii) no Participant in the Plan may be granted
Incentive Awards denominated in cash in an amount in excess of $5,000,000 in the
aggregate during any calendar year; and (iii) no more than 12,000,000 shares of
Common Stock may be issued pursuant to the exercise of Incentive Stock Options
granted under the Plan, with the foregoing share limits subject, in each case,
to adjustment as provided in Section 4.3 of the Plan.

 

4.2                               Accounting for Incentive Awards.  Shares of
Common Stock that are issued under the Plan or that are potentially issuable
pursuant to outstanding Incentive Awards will be applied to reduce the maximum
number of shares of Common Stock remaining available for issuance under the
Plan; provided, however, that (A) the total number of shares remaining available
for issuance under the Plan shall be reduced by 2.5 shares for each share issued
pursuant to an Incentive Award other than an Option or a Stock Appreciation
Right, or potentially issuable pursuant to an outstanding Incentive Award other
than an Option or a Stock Appreciation Right;

 

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and (B) Substitute Awards shall not reduce the maximum number of shares of
Common Stock remaining available for issuance under the Plan.  Any shares of
Common Stock subject to an Incentive Award, or to an award granted under the
Prior Plan that is outstanding on the original effective date of this Plan (a
“Prior Plan Award”), that lapses, expires, is forfeited (including issued shares
forfeited under a Restricted Stock Award) or for any reason is terminated
unexercised or unvested or is settled or paid in cash or any form other than
shares of Common Stock shall, to the extent of such lapse, expiration,
forfeiture or settlement other than in shares of Common Stock, automatically
again become available for issuance under the Plan and correspondingly increase
the total number of shares available for issuance under Section 4.1 (with such
increase in connection with Incentive Awards other than Options and Stock
Appreciation Rights or Prior Plan Awards other than stock options or stock
appreciation rights based on the same share ratio (such as that specified in
clause (A) of the proviso to the first sentence of this Section 4.2) by which
the applicable share reserve was decreased upon the grant of the applicable
Award).  Similarly, any shares of Common Stock that are withheld by the Company,
or any Previously Acquired Shares that are tendered (either actually or by
attestation) by a Participant, in either case to satisfy any tax withholding
obligation with respect to an Incentive Award other than an Option or Stock
Appreciation Right or a Prior Plan Award other than a stock option or stock
appreciation right shall automatically again become available for issuance under
the Plan and correspondingly increase the total number of shares available for
issuance under Section 4.1 (with such increase based on the same share ratio
(such as that specified in clause (A) of the proviso to the first sentence of
this Section 4.2) by which the applicable share reserve was decreased upon the
grant of the applicable Award).  Notwithstanding anything to the contrary in
this Section 4.2, the following shares of Common Stock will not again become
available for issuance under the Plan: (i) any shares which would have been
issued upon any exercise of an Option but for the fact that the Option exercise
price was paid by a “net exercise” pursuant to Section 6.4(b) or by Previously
Acquired Shares tendered (either actually or by attestation) by a Participant;
(ii) any shares that are withheld by the Company, or any Previously Acquired
Shares that are tendered (either actually or by attestation) by a Participant,
in either case to satisfy any tax withholding obligation with respect to an
Option or Stock Appreciation Right or a Prior Plan stock option or stock
appreciation right; (iii) shares covered by a stock appreciation right issued
under the Plan or the Prior Plan that are not issued in connection with the
stock settlement of the stock appreciation right upon its exercise; or
(iv) shares that are repurchased by the Company using Option exercise proceeds.

 

4.3                               Adjustments to Shares and Incentive Awards. 
In the event of any equity restructuring (within the meaning of FASB ASC Topic
718, Compensation - Stock Compensation) that causes the per share value of
shares of Common Stock to change, such as a stock dividend, stock split,
spinoff, rights offering or recapitalization through an extraordinary dividend,
the Committee shall make such adjustments as it deems equitable and appropriate
to (i) the aggregate number and kind of shares or other securities issued or
reserved for issuance under the Plan, (ii) the number and kind of shares or
other securities subject to outstanding Incentive Awards, (iii) the exercise
price of outstanding Options and Stock Appreciation Rights, and (iv) any maximum
limitations prescribed by the Plan with respect to certain types of Incentive
Awards or the grants to individuals of certain types of Incentive Awards.  In
the event of any other change in corporate capitalization, including a merger,
consolidation, reorganization, or partial or complete liquidation of the
Company, such equitable adjustments described in the foregoing sentence may be
made as determined to be appropriate and equitable by the

 

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Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) to prevent
dilution or enlargement of rights of Participants.  In either case, any such
adjustment shall be conclusive and binding for all purposes of the Plan.  No
adjustment shall be made pursuant to this Section 4.3 in connection with the
conversion of any convertible securities of the Company, or in a manner that
would cause Incentive Stock Options to violate Section 422(b) of the Code or
cause an Incentive Award to be subject to adverse tax
consequences under Section 409A of the Code.

 

4.4                               Effect of Plans Maintained by Acquired
Companies.  If a company acquired by the Company or any Subsidiary or with which
the Company or any Subsidiary combines has shares available under a pre-existing
plan approved by stockholders and not adopted in contemplation of such
acquisition or combination, the shares available for grant pursuant to the terms
of such pre-existing plan (as adjusted, to the extent appropriate, using the
exchange ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the holders
of common stock of the entities party to such acquisition or combination) may be
used for Incentive Awards under the Plan and shall not reduce the shares of
Common Stock authorized for issuance under the Plan.  Incentive Awards using
such available shares shall not be made after the date awards could have been
made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not employees of the
Company or any Subsidiary or Non-Employee Directors prior to such acquisition or
combination.

 

5.                                      Participation.

 

Participants in the Plan will be those Eligible Recipients who, in the judgment
of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries.  Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion.  Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will not be earlier than the date the
Committee approved the grant resolution and will be the date of any related
agreement with the Participant.

 

6.                                      Options.

 

6.1                               Grant.  An Eligible Recipient may be granted
one or more Options under the Plan, and such Options will be subject to such
terms and conditions, consistent with the other provisions of the Plan, as may
be determined by the Committee in its sole discretion.  The Committee may
designate whether an Option is to be considered an Incentive Stock Option or a
Non-Statutory Stock Option.  To the extent that any Incentive Stock Option
granted under the Plan ceases for any reason to qualify as an “incentive stock
option” for purposes of Section 422 of the Code, such Incentive Stock Option
will continue to be outstanding for purposes of the Plan but will thereafter be
deemed to be a Non-Statutory Stock Option.

 

6.2                               Exercise Price.  The per share price to be
paid by a Participant upon exercise of an Option will be determined by the
Committee in its discretion at the time of the Option grant,

 

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provided that such price will not be less than 100% of the Fair Market Value of
one share of Common Stock on the date of grant, except in the case of Substitute
Awards.

 

6.3                               Exercisability and Duration.  An Option will
become exercisable at such times and in such installments and upon such terms
and conditions as may be determined by the Committee in its sole discretion at
the time of grant (including without limitation (i) the achievement of one or
more of the Performance Criteria; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period; provided, however, that no Option may be exercisable after 10 years from
its date of grant.

 

6.4                               Payment of Exercise Price.

 

(a)                                 The total purchase price of the shares to be
purchased upon exercise of an Option will be paid entirely in cash (including
check, bank draft or money order); provided, however, that the Committee, in its
sole discretion and upon terms and conditions established by the Committee, may
allow such payments to be made, in whole or in part, by (i) tender of a Broker
Exercise Notice; (ii) by tender, or attestation as to ownership, of Previously
Acquired Shares that have been held for the period of time necessary to avoid a
charge to the Company’s earnings for financial reporting purposes and that are
otherwise acceptable to the Committee; (iii) by a “net exercise of the Option
(as further described in paragraph (b), below); or (iv) by a combination of such
methods.

 

(b)                                 In the case of a “net exercise” of an
Option, the Company will not require a payment of the exercise price of the
Option from the Participant but will reduce the number of shares of Common Stock
issued upon the exercise by the largest number of whole shares that has a Fair
Market Value that does not exceed the aggregate exercise price for the shares
exercised under this method. Shares of Common Stock will no longer be
outstanding under an Option (and will therefore not thereafter be exercisable)
following the exercise of such Option to the extent of (i) shares used to pay
the exercise price of an Option under the “net exercise,” (ii) shares actually
delivered to the Participant as a result of such exercise and (iii) any shares
withheld for purposes of tax withholding pursuant to Section 13.1.

 

(c)                                  Previously Acquired Shares tendered or
covered by an attestation as payment of an Option exercise price will be valued
at their Fair Market Value on the exercise date.

 

6.5                               Manner of Exercise.  An Option may be
exercised by a Participant in whole or in part from time to time, subject to the
conditions contained in the Plan and in the agreement evidencing such Option, by
giving written or electronic notice of exercise to the Company at its principal
executive office in St. Paul, Minnesota or through the procedures established
with any Company-appointed third-party administrator specifying the number of
shares of Common Stock as to which the Option is being exercised and by paying
in full the total exercise price for the shares of Common Stock to be purchased
in accordance with Section 6.4 of the Plan.

 

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7.                                      Stock Appreciation Rights.

 

7.1                               Grant.  An Eligible Recipient may be granted
one or more Stock Appreciation Rights under the Plan, and such Stock
Appreciation Rights will be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by the Committee in
its sole discretion.  The Committee will have the sole discretion to determine
the form in which payment of the intrinsic value of Stock Appreciation Rights
will be made to a Participant (i.e., cash, Common Stock or any combination
thereof) or to consent to or disapprove the election by a Participant of the
form of such payment.

 

7.2                               Exercise Price.  The exercise price of a Stock
Appreciation Right will be determined by the Committee, in its discretion, at
the date of grant but may not be less than 100% of the Fair Market Value of one
share of Common Stock on the date of grant, except as provided in Section 7.4
below and except in the case of Substitute Awards.

 

7.3                               Exercisability and Duration.  A Stock
Appreciation Right will become exercisable at such time and in such installments
as may be determined by the Committee in its sole discretion at the time of
grant; provided, however, that no Stock Appreciation Right may be exercisable
after 10 years from its date of grant.  A Stock Appreciation Right will be
exercised by giving notice in the same manner as for Options, as set forth in
Section 6.5 of the Plan.

 

7.4                               Grants in Tandem with Options.  Stock
Appreciation Rights may be granted alone or in addition to other Incentive
Awards, or in tandem with an Option, either at the time of grant of the Option
or at any time thereafter during the term of the Option.  A Stock Appreciation
Right granted in tandem with an Option shall cover the same number of shares of
Common Stock as covered by the Option (or such lesser number as the Committee
may determine), shall be exercisable at such time or times and only to the
extent that the related Option is exercisable, have the same term as the Option
and shall have an exercise price equal to the exercise price for the Option. 
Upon the exercise of a Stock Appreciation Right granted in tandem with an
Option, the Option shall be canceled automatically to the extent of the number
of shares covered by such exercise; conversely, upon exercise of an Option
having a related Stock Appreciation Right, the Stock Appreciation Right shall be
canceled automatically to the extent of the number of shares covered by the
Option exercise.

 

8.                                      Restricted Stock Awards.

 

8.1                               Grant.  An Eligible Recipient may be granted
one or more Restricted Stock Awards under the Plan, and such Restricted Stock
Awards will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole
discretion.  The Committee may impose such restrictions or conditions, not
inconsistent with the provisions of the Plan, to the vesting of such Restricted
Stock Awards as it deems appropriate, including, without limitation, (i) the
achievement of one or more of the Performance Criteria; and/or that (ii) the
Participant remain in the continuous employ or service of the Company or a
Subsidiary for a certain period.

 

8.2                               Rights as a Stockholder; Transferability. 
Except as provided in Sections 8.1, 8.3, 8.4 and 15.3 of the Plan, a Participant
will have all voting, dividend, liquidation and other rights

 

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with respect to shares of Common Stock issued to the Participant as a Restricted
Stock Award under this Section 8 upon the Participant becoming the holder of
record of such shares as if such Participant were a holder of record of shares
of unrestricted Common Stock.

 

8.3                               Dividends and Distributions.  Unless the
Committee determines otherwise in its sole discretion (either in the agreement
evidencing the Restricted Stock Award at the time of grant or at any time after
the grant of the Restricted Stock Award), any dividends or distributions (other
than regular quarterly cash dividends in the case of Restricted Stock Awards
that are subject only to service-based vesting conditions) paid with respect to
shares of Common Stock subject to the unvested portion of a Restricted Stock
Award will be subject to the same restrictions as the shares to which such
dividends or distributions relate.  The Committee will determine in its sole
discretion whether any interest will be paid on such restricted dividends or
distributions.  In its discretion, the Committee may provide in any award
agreement evidencing a Restricted Stock Award for the waiver by the Participant
of any right to receive dividends and distributions with respect to shares of
Common Stock subject to the unvested portion of the Restricted Stock Award.

 

8.4                               Enforcement of Restrictions.  To enforce the
restrictions referred to in this Section 8, the Committee may place a legend on
the stock certificates referring to such restrictions and may require the
Participant, until the restrictions have lapsed, to keep the stock certificates,
together with duly endorsed stock powers, in the custody of the Company or its
transfer agent, or to maintain evidence of stock ownership, together with duly
endorsed stock powers, in a certificateless book-entry stock account with the
Company’s transfer agent.

 

9.                                      Stock Unit Awards.

 

An Eligible Recipient may be granted one or more Stock Unit Awards under the
Plan, and such Stock Unit Awards will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion.  The Committee may impose such restrictions or
conditions, not inconsistent with the provisions of the Plan, to the payment,
issuance, retention and/or vesting of such Stock Unit Awards as it deems
appropriate, including, without limitation, (i) the achievement of one or more
of the Performance Criteria; and/or that (ii) the Participant remain in the
continuous employ or service of the Company or a Subsidiary for a certain
period.  The agreement evidencing a Stock Unit Award shall either (i) provide
that in all cases payment of the Stock Unit Award will be made within two and
one-half months following the end of the Eligible Recipient’s tax year during
which receipt of the Stock Unit Award is no longer subject to a “substantial
risk of forfeiture” within the meaning of Section 409A of the Code, or
(ii) contain terms and conditions necessary to avoid adverse tax consequences
specified in Section 409A of the Code.

 

10.                               Performance Awards.

 

An Eligible Recipient may be granted one or more Performance Awards under the
Plan, and such Performance Awards will be subject to such terms and conditions,
if any, consistent with the other provisions of the Plan, as may be determined
by the Committee in its sole discretion, including, but not limited to, the
achievement of one or more of the Performance Criteria.  The agreement
evidencing a Performance Award shall either (i) provide that in all cases

 

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payment of the Performance Award will be made within two and one-half months
following the end of the Eligible Recipient’s tax year during which receipt of
the Performance Award is no longer subject to a “substantial risk of forfeiture”
within the meaning of Section 409A of the Code, or (ii) contain terms and
conditions necessary to avoid adverse tax consequences specified in Section 409A
of the Code.

 

11.                               Minimum Vesting Periods.

 

Except as otherwise provided in this Section 11, (i) Restricted Stock Awards and
Stock Unit Awards that vest solely as a result of the passage of time and
continued service by the Participant shall be subject to a vesting period of not
less than three years from the date of grant of the applicable Incentive Award
(but permitting pro rata vesting over such time); and (ii) Restricted Stock
Awards, Stock Unit Awards and Performance Awards whose vesting is subject to the
achievement of specified Performance Criteria over a performance period shall be
subject to a performance period of not less than one year.  The minimum vesting
periods specified in clauses (i) and (ii) of the preceding sentence shall not
apply: (A) to Incentive Awards made in payment of earned performance-based
Incentive Awards and other earned cash-based incentive compensation; (B) to a
termination of employment due to death, Disability or Retirement; (C) upon a
Change in Control; (D) to a Substitute Award that does not reduce the vesting
period of the award being replaced; or (E) to Incentive Awards involving an
aggregate number of shares of Common Stock not in excess of 5% of the number of
shares available for Incentive Awards under the first sentence of Section 4.1.

 

12.                               Effect of Termination of Employment or Other
Service.

 

The following provisions shall apply upon termination of a Participant’s
employment or other service with the Company and all Subsidiaries, except to the
extent that the Committee provides otherwise in an agreement evidencing an
Incentive Award at the time of grant or determines pursuant to Section 12.4.

 

12.1                        Termination of Employment Due to Death or
Disability.  In the event a Participant’s employment or other service with the
Company and all Subsidiaries is terminated by reason of death or Disability:

 

(a)                                 All outstanding Options and Stock
Appreciation Rights then held by the Participant will become immediately
exercisable in full and will remain exercisable for a period of five years after
such termination (but in no event after the expiration date of any such Option
or Stock Appreciation Right).

 

(b)                                 All unvested Restricted Stock Awards and
Stock Unit Awards then held by the Participant that are subject only to
service-based vesting conditions will become fully vested.

 

(c)                                  The service-based vesting conditions
associated with all unvested Restricted Stock Awards, Stock Unit Awards and
Performance Awards then held by the Participant that are also subject to the
achievement of specified Performance Criteria over a performance period as a
condition of vesting will be deemed satisfied, but vesting of

 

14

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such Incentive Awards shall occur only when and to the extent the applicable
Performance Criteria are satisfied.

 

12.2                        Termination of Employment Due to Retirement. 
Subject to Section 12.5 of the Plan, in the event a Participant’s employment or
other service with the Company and all Subsidiaries is terminated by reason of
Retirement:

 

(a)                                 All outstanding Options and Stock
Appreciation Rights then held by the Participant that have been outstanding for
at least six months from the applicable date of grant will become immediately
exercisable in full and will remain exercisable for a period of five years after
such termination (but in no event after the expiration date of any such Option
or Stock Appreciation Right), and any Options and Stock Appreciation Rights then
held by the Participant that have not been outstanding for at least six months
will terminate and be forfeited.

 

(b)                                 All unvested Restricted Stock Awards and
Stock Unit Awards then held by the Participant that are subject only to
service-based vesting conditions will terminate and be forfeited.

 

(c)                                  The service-based vesting conditions
associated with all unvested Restricted Stock Awards, Stock Unit Awards and
Performance Awards then held by the Participant that are also subject to the
achievement of specified Performance Criteria over a performance period as a
condition of vesting shall be deemed satisfied if such Incentive Awards have
been outstanding for at least six months from the applicable date of grant, but
vesting of such Incentive Awards will occur only when and to the extent the
applicable Performance Criteria are satisfied; any such Incentive Awards then
held by the Participant that have not been outstanding for at least six months
will terminate and be forfeited.

 

12.3                        Termination of Employment for Reasons Other than
Death, Disability or Retirement. Subject to Section 12.5 of the Plan, in the
event a Participant’s employment or other service is terminated with the Company
and all Subsidiaries for any reason other than death, Disability or Retirement,
or a Participant is in the employ or service of a Subsidiary and the Subsidiary
ceases to be a Subsidiary of the Company (unless the Participant continues in
the employ or service of the Company or another Subsidiary):

 

(a)                                 All outstanding Options and Stock
Appreciation Rights then held by the Participant will, to the extent exercisable
as of such termination, remain exercisable for a period of three months after
such termination (but in no event after the expiration date of any such Option
or Stock Appreciation Right), and will, to the extent not exercisable as of such
termination, terminate and be forfeited.

 

(b)                                 All unvested Restricted Stock Awards, Stock
Unit Awards and Performance Awards then held by the Participant will terminate
and be forfeited.

 

12.4                        Modification of Rights Upon Termination. 
Notwithstanding the other provisions of this Section 12, upon a Participant’s
termination of employment or other service with the Company and all
Subsidiaries, the Committee may, in its sole discretion (which may be

 

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exercised at any time on or after the date of grant, including following such
termination), except as provided in clauses (ii) and (iii) below, cause Options
or Stock Appreciation Rights (or any part thereof) then held by such Participant
to terminate, become or continue to become exercisable and/or remain exercisable
following such termination of employment or service, and Restricted Stock
Awards, Stock Unit Awards or Performance Awards then held by such Participant to
terminate, vest and/or continue to vest or become free of restrictions and
conditions to payment, as the case may be, following such termination of
employment or service, in each case in the manner determined by the Committee;
provided, however, that (i) no Incentive Award may remain exercisable or
continue to vest for more than two years beyond the date such Incentive Award
would have terminated if not for the provisions of this Section 12.4 but in no
event beyond its expiration date; (ii) any such action adversely affecting any
outstanding Incentive Award will not be effective without the consent of the
affected Participant (subject to the right of the Committee to take whatever
action it deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan); and
(iii) such actions (other than termination of an Incentive Award) occurring
other than in connection with the death, Disability or Retirement of a
Participant shall not involve an aggregate number of shares of Common Stock in
excess of 5% of the number of shares available for Incentive Awards under the
first sentence of Section 4.1).

 

12.5                        Effects of Actions Constituting Cause. 
Notwithstanding anything in the Plan to the contrary, in the event that a
Participant is determined by the Committee, acting in its sole discretion, to
have committed any action which would constitute Cause as defined in
Section 2.3, irrespective of whether such action or the Committee’s
determination occurs before or after termination of such Participant’s
employment with the Company or any Subsidiary, all rights of the Participant
under the Plan and any agreements evidencing an Incentive Award then held by the
Participant shall terminate and be forfeited without notice of any kind.  The
Company may defer the exercise of any Option, the vesting of any Restricted
Stock Award or the payment of any Stock Unit Award or Performance Award for a
period of up to forty-five (45) days in order for the Committee to make any
determination as to the existence of Cause.

 

12.6                        Determination of Termination of Employment or Other
Service.

 

(a)                                 The change in a Participant’s status from
that of an employee of the Company or any Subsidiary to that of a non-employee
consultant or advisor of the Company or any Subsidiary will, for purposes of the
Plan, be deemed to result in a termination of such Participant’s employment with
the Company and its Subsidiaries, unless the Committee otherwise determines in
its sole discretion.

 

(b)                                 The change in a Participant’s status from
that of a non-employee consultant or advisor of the Company or any Subsidiary to
that of an employee of the Company or any Subsidiary will not, for purposes of
the Plan, be deemed to result in a termination of such Participant’s service as
a non-employee consultant or advisor with the Company and its Subsidiaries, and
such Participant will thereafter be deemed to be an employee of the Company or
its Subsidiaries until such Participant’s employment is terminated, in which
event such Participant will be governed by the provisions of this Plan relating
to termination of employment (subject to paragraph (a), above).

 

16

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(c)                                  Unless the Committee otherwise determines
in its sole discretion, a Participant’s employment or other service will, for
purposes of the Plan, be deemed to have terminated on the date recorded on the
personnel or other records of the Company or the Subsidiary for which the
Participant provides employment or other service, as determined by the Committee
in its sole discretion based upon such records; provided, however, if
distribution or payment of an Incentive Award subject to Section 409A of the
Code is triggered by a termination of a Participant’s employment, such
termination must also constitute a “separation from service” within the meaning
of Section 409A of the Code.

 

13.                               Payment of Withholding Taxes.

 

13.1                        General Rules.  The Company is entitled to
(a) withhold and deduct from future wages of the Participant (or from other
amounts that may be due and owing to the Participant from the Company or a
Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, foreign, state and
local withholding and employment-related tax requirements attributable to an
Incentive Award, including, without limitation, the grant, exercise or vesting
of, or payment of dividends with respect to, an Incentive Award or a
disqualifying disposition of stock received upon exercise of an Incentive Stock
Option; (b) withhold cash paid or payable or shares of Common Stock from the
shares issued or otherwise issuable to the Participant in connection with an
Incentive Award; or (c) require the Participant promptly to remit the amount of
such withholding to the Company before taking any action, including issuing any
shares of Common Stock, with respect to an Incentive Award.

 

13.2                        Special Rules.  The Committee may, in its sole
discretion and upon terms and conditions established by the Committee, permit or
require a Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 13.1 of the Plan by
electing to tender, or by attestation as to ownership of, Previously Acquired
Shares that have been held for the period of time necessary to avoid a charge to
the Company’s earnings for financial reporting purposes and that are otherwise
acceptable to the Committee, by delivery of a Broker Exercise Notice or a
combination of such methods.  For purposes of satisfying a Participant’s
withholding or employment-related tax obligation, Previously Acquired Shares
tendered or covered by an attestation will be valued at their Fair Market Value.

 

14.                               Change in Control.

 

14.1                        A “Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

 

(a)                                 any “person” as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than  the Company, any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes, including pursuant to a
tender or exchange offer for shares of Common Stock pursuant to which purchases
are made, the “beneficial owner” (as defined in Rule l3d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined

 

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voting power of the Company’s then outstanding securities, provided, however,
that the provisions of this paragraph (a) shall not be applicable to a
transaction in which a corporation becomes the owner of all the Company’s
outstanding securities in a transaction that would not be a Change of Control
under paragraph (c) of this Section 14.1; or

 

(b)                                 during any twenty-four (24) consecutive
calendar months, individuals who constitute the Board on the first day of such
period or any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest including,
but not limited to, a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board or
nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who were either directors on the first day of such period, or whose
appointment, election or nomination for election was previously so approved or
recommended, shall cease for any reason to constitute at least a majority
thereof; or

 

(c)                                  there is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof) more than 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, and in which no
“person” (as defined under paragraph (a) above) acquires 50% or more of the
combined voting power of the securities of the Company or such surviving entity
or parent thereof outstanding immediately after such merger or consolidation; or

 

(d)                                 there is consummated a plan of complete
liquidation or dissolution of the Company or there is consummated the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, more than 50% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.

 

14.2                        Effect of a Change in Control.  Unless otherwise
provided in an agreement evidencing an Incentive Award, the following provisions
shall apply to outstanding Incentive Awards in the event of a Change in Control.

 

(a)                                 Continuation, Assumption or Replacement of
Incentive Awards.  In the event of a Change in Control, the surviving or
successor entity (or its parent corporation) may continue, assume or replace
Incentive Awards outstanding as of the date of the Change in Control (with such
adjustments as may be required or permitted by Section 4.3), and such Incentive
Awards or replacements therefore shall remain outstanding and be governed by
their respective terms, subject to Section 14.2(d) below.  A surviving or

 

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successor entity may elect to continue, assume or replace only some Incentive
Awards or portions of Incentive Awards.  For purposes of this Section 14.2(a),
an Incentive Award shall be considered assumed or replaced if, in connection
with the Change in Control and in a manner consistent with Sections 409A and 424
of the Code, either (i) the contractual obligations represented by the Incentive
Award are expressly assumed by the surviving or successor entity (or its parent
corporation) with appropriate adjustments to the number and type of securities
subject to the Incentive Award and the exercise price thereof that preserves the
intrinsic value of the Incentive Award existing at the time of the Change in
Control, or (ii) the Participant has received a comparable equity-based award
that preserves the intrinsic value of the Incentive Award existing at the time
of the Change in Control and provides for a vesting or exercisability schedule
that is the same as or more favorable to the Participant.

 

(b)                                 Acceleration of Incentive Awards.  If and to
the extent that outstanding Incentive Awards under the Plan are not continued,
assumed or replaced in connection with a Change in Control, then (i) outstanding
Options and Stock Appreciation Rights issued to the Participant that are not yet
fully exercisable shall immediately become exercisable in full and shall remain
exercisable in accordance with their terms, (ii) all unvested Restricted Stock
Awards, Stock Unit Awards and Performance Awards will become immediately fully
vested and non-forfeitable; and (iii) any Performance Criteria applicable to
Restricted Stock Awards, Stock Unit Awards and Performance Awards will be deemed
to have been satisfied at the target level of performance specified in
connection with the applicable Incentive Award.

 

(c)                                  Payment for Incentive Awards.  If and to
the extent that outstanding Incentive Awards under the Plan are not continued,
assumed or replaced in connection with a Change in Control, then the Committee
may terminate some or all of such outstanding Incentive Awards, in whole or in
part, as of the effective time of the Change in Control in exchange for payments
to the holders as provided in this Section 14.2(c).  The Committee will not be
required to treat all Incentive Awards similarly for purposes of this
Section 14.2(c).  The payment for any Incentive Award or portion thereof
terminated shall be in an amount equal to the excess, if any, of (i) the fair
market value (as determined in good faith by the Committee) of the consideration
that would otherwise be received in the Change in Control for the number of
shares of Common Stock subject to the Incentive Award or portion thereof being
terminated, or, if no consideration is to be received by the Company’s
stockholders in the Change in Control, the Fair Market Value of such number of
shares immediately prior to the effective date of the Change in Control, over
(ii) the aggregate exercise price (if any) for the shares of Common Stock
subject to the Incentive Award or portion thereof being terminated.  If there is
no excess, the Incentive Award may be terminated without payment.  Any payment
shall be made in such form, on such terms and subject to such conditions as the
Committee determines in its discretion, which may or may not be the same as the
form, terms and conditions applicable to payments to the Company’s stockholders
in connection with the Change in Control, and may include subjecting such
payments to vesting conditions comparable to those of the Incentive Award
surrendered.

 

(d)                                 Termination After a Change in Control.  If
and to the extent that Incentive

 

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Awards are continued, assumed or replaced under the circumstances described in
Section 14.2(a), and if within two years after the Change in Control a
Participant experiences an involuntary termination of employment or other
service for reasons other than Cause, or terminates his or her employment or
other service for Good Reason, then (i) outstanding Options and Stock
Appreciation Rights issued to the Participant that are not yet fully exercisable
shall immediately become exercisable in full and shall remain exercisable in
accordance with their terms, (ii) all unvested Restricted Stock Awards, Stock
Unit Awards and Performance Awards will become immediately fully vested and
non-forfeitable; and (iii) any Performance Criteria applicable to Restricted
Stock Awards, Stock Unit Awards and Performance Awards will be deemed to have
been satisfied at the target level of performance specified in connection with
the applicable Incentive Award.

 

15.                               Rights of Eligible Recipients and
Participants; Transferability.

 

15.1                        Employment or Service.  Nothing in the Plan will
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate the employment or service of any Eligible Recipient or Participant at
any time, nor confer upon any Eligible Recipient or Participant any right to
continue in the employ or service of the Company or any Subsidiary.

 

15.2                        Rights as a Stockholder; Dividends.  As a holder of
Incentive Awards (other than Restricted Stock Awards), a Participant will have
no rights as a stockholder unless and until such Incentive Awards are exercised
for, or paid in the form of, shares of Common Stock and the Participant becomes
the holder of record of such shares.  Except as otherwise provided in the Plan
or otherwise provided by the Committee, no adjustment will be made in the amount
of cash payable or in the number of shares of Common Stock issuable under
Incentive Awards denominated in or based on the value of shares of Common Stock
as a result of cash dividends or distributions paid to holders of Common Stock
prior to the payment of, or issuance of shares of Common Stock under, such
Incentive Awards.  In its discretion, the Committee may provide in an agreement
evidencing a Stock Unit Award or a Performance Award that the Participant will
be entitled to receive dividend equivalents, in the form of a cash credit to an
account for the benefit of the Participant, for any such dividends and
distributions.  The terms of any rights to dividend equivalents will be
determined by the Committee and set forth in the agreement evidencing the Stock
Unit Award or Performance Award, including the time and form of payment and
whether such equivalents will be credited with interest or deemed to be
reinvested in Common Stock; provided, however, that dividend equivalents in
respect of the unvested portions of Stock Unit Awards and Performance Awards
whose vesting is subject to the achievement of specified Performance Criteria
will be subject to the same restrictions as the underlying shares or units to
which such dividend equivalents relate.  No dividend equivalents may be paid or
credited in connection with Options and Stock Appreciation Rights.

 

15.3                        Restrictions on Transfer.

 

(a)                                 Except pursuant to testamentary will or the
laws of descent and distribution or as otherwise expressly permitted by
subsections (b) and (c) below, no right or interest of any Participant in an
Incentive Award prior to the exercise (in the case of Options or Stock
Appreciation Rights) or vesting or issuance (in the case of Restricted Stock
Awards, Stock Unit Awards and Performance Awards) of such Incentive Award

 

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will be assignable or transferable, or subjected to any lien, during the
lifetime of the Participant, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise.

 

(b)                                 A Participant will be entitled to designate
a beneficiary to receive an Incentive Award upon such Participant’s death, and
in the event of such Participant’s death, payment of any amounts due under the
Plan will be made to, and exercise of any Options or Stock Appreciation Rights
(to the extent permitted pursuant to Section 12 of the Plan) may be made by,
such beneficiary.  If a deceased Participant has failed to designate a
beneficiary, or if a beneficiary designated by the Participant fails to survive
the Participant, payment of any amounts due under the Plan will be made to, and
exercise of any Options or Stock Appreciation Rights (to the extent permitted
pursuant to Section 12 of the Plan) may be made by, the Participant’s legal
representatives, heirs and legatees.  If a deceased Participant has designated a
beneficiary and such beneficiary survives the Participant but dies before
complete payment of all amounts due under the Plan or exercise of all
exercisable Options or Stock Appreciation Rights, then such payments will be
made to, and the exercise of such Options or Stock Appreciation Rights may be
made by, the legal representatives, heirs and legatees of the beneficiary.

 

(c)                                  Upon a Participant’s request, the Committee
may, in its sole discretion, permit a transfer of all or a portion of a
Non-Statutory Stock Option or Stock Appreciation Right, other than for value, to
such Participant’s child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
any person sharing such Participant’s household (other than a tenant or
employee), a trust in which any of the foregoing have more than fifty percent of
the beneficial interests, a foundation in which any of the foregoing (or the
Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than fifty percent of the voting
interests.  Any permitted transferee will remain subject to all the terms and
conditions applicable to the Participant prior to the transfer.  A permitted
transfer may be conditioned upon such requirements as the Committee may, in its
sole discretion, determine, including, but not limited to execution and/or
delivery of appropriate acknowledgements, opinion of counsel, or other documents
by the transferee.

 

15.4                        Non-Exclusivity of the Plan.  Nothing contained in
the Plan is intended to modify or rescind any previously approved compensation
plans or programs of the Company or create any limitations on the power or
authority of the Board to adopt such additional or other compensation
arrangements as the Board may deem necessary or desirable.

 

16.                               Securities Law and Other Restrictions.

 

Notwithstanding any other provision of the Plan or any agreements entered into
pursuant to the Plan, the Company will not be required to issue any shares of
Common Stock under this Plan, and a Participant may not sell, assign, transfer
or otherwise dispose of shares of Common Stock issued pursuant to Incentive
Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable

 

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securities laws of a state or foreign jurisdiction or an exemption from such
registration under the Securities Act and applicable state or foreign securities
laws, and (b) there has been obtained any other consent, approval or permit from
any other U.S. or foreign regulatory body which the Committee, in its sole
discretion, deems necessary or advisable.  The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other restrictions.

 

17.                               Performance-Based Compensation Provisions.

 

The Committee, when it is comprised solely of two or more outside directors
meeting the requirements of Section 162(m) of the Code, in its sole discretion,
may designate whether any Restricted Stock Awards, Stock Unit Awards or
Performance Awards to be made to Covered Employees are intended to be
Performance-Based Compensation.  The vesting of such Incentive Awards and the
distribution of cash, shares of Common Stock or other property pursuant thereto,
as applicable, will, to the extent required by Section 162(m) of the Code, be
conditioned upon the achievement of performance goals based on one or more
Performance Criteria specified in Section 2.22.  Such Performance Criteria will
be selected and performance goals established by the Committee within the time
period prescribed by, and will otherwise comply with the requirements of,
Section 162(m) of the Code.  Following completion of an applicable performance
period, the Committee shall certify in writing, in the manner and to the extent
required by Section 162(m) of the Code, that the applicable performance goals
based on the selected Performance Criteria have been met prior to payment of the
compensation, and may adjust downward, but not upward, any amount determined to
be otherwise payable in connection with such an Incentive Award.

 

18.                               Compliance with Section 409A.

 

It is intended that the Plan and all Incentive Awards hereunder be administered
in a manner that will comply with Section 409A of the Code, including the final
regulations and other guidance issued by the Secretary of the Treasury and the
Internal Revenue Service with respect thereto.  The Committee is authorized to
adopt rules or regulations deemed necessary or appropriate to qualify for an
exception from or to comply with the requirements of Section 409A of the Code
(including any transition or grandfather rules relating thereto). 
Notwithstanding anything in this Section 18 to the contrary, with respect to any
Incentive Award subject to Section 409A of the Code, no amendment to or payment
under such Incentive Award will be made unless permitted under Section 409A of
the Code and the regulations or rulings issued thereunder.  Without limiting the
generality of the foregoing, if any amount shall be payable with respect to any
Incentive Award hereunder as a result of a Participant’s “separation from
service” at such time as the Participant is a “specified employee” (as those
terms are defined for purposes of Section 409A of the Code) and such amount is
subject to the provisions of Section 409A of the Code, then no payment shall be
made, except as permitted under Section 409A of the Code, prior to the first day
of the seventh calendar month beginning after the Participant’s separation from
service (or the date of his or her earlier death).  The Company may adopt a
specified employee policy that will apply to identify the specified employees
for all deferred compensation plans subject to Section 409A of the Code;
otherwise, specified employees will be identified

 

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using the default standards contained in the regulations under Section 409A of
the Code.

 

Notwithstanding anything to the contrary in this Plan, none of the Company, the
Committee nor any other person involved with the administration of this Plan
shall in any way be responsible for ensuring the exemption of any Incentive
Award from, or compliance by any Incentive Award with, the requirements of
Section 409A of the Code.  By accepting an Incentive Award under this Plan, each
Participant acknowledges that neither the Company, the Committee nor any other
person involved with the administration of this Plan has any duty or obligation
to design or administer the Plan or Incentive Awards granted thereunder in a
manner that minimizes a Participant’s tax liabilities, including the avoidance
of any additional tax liabilities under Section 409A of the Code.

 

19.                               Amendment, Modification and Termination.

 

The Board may suspend or terminate the Plan or any portion thereof at any time. 
In addition to the authority of the Committee to amend the Plan under
Section 3.2(e), the Board may amend the Plan from time to time in such respects
as the Board may deem advisable in order that Incentive Awards under the Plan
will conform to any change in applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company; provided,
however, that no such amendments to the Plan will be effective without approval
of the Company’s stockholders if: (i) stockholder approval of the amendment is
then required pursuant to Section 422 of the Code or Section 162(m) of the Code
or the rules of the New York Stock Exchange; or (ii) such amendment seeks to
modify Section 3.2(d) hereof.  No termination, suspension or amendment of the
Plan may adversely affect any outstanding Incentive Award without the consent of
the affected Participant; provided, however, that (i) this sentence will not
impair the right of the Committee to take whatever action it deems appropriate
under Sections 3.2(c), 4.3 and 14 of the Plan, and (ii) no consent of any
affected Participant shall be required if such amendment is necessary to comply
with applicable law or stock exchange rules.

 

20.                               Effective Date and Duration of the Plan.

 

The Plan originally became effective as of May 6, 2010, the date on which it was
initially approved by the Company’s stockholders.  The Plan as amended and
restated will become effective on the date it is approved by the Company’s
stockholders (the “Effective Date”).  If the Company’s stockholders fail to
approve the amendment and restatement of the Plan by June 30, 2013, the Plan
will continue in effect in the form in which it existed immediately prior to
that date, and any Awards made under the Plan that were contingent upon approval
of the amendment and restatement of the Plan by the Company’s stockholders shall
be void and of no effect.  The Plan as amended and restated will terminate at
midnight on the tenth (10th) anniversary of the Effective Date (unless the
Company’s stockholders fail to approve the amendment and restatement of the
Plan, in which case the Plan will terminate on the tenth anniversary of the
original effective date), and may be terminated prior to such time by Board
action.  No Incentive Award will be granted after termination of the Plan. 
Incentive Awards outstanding upon termination of the Plan may continue to be
exercised, earned or become free of restrictions, according to their terms.

 

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21.                               Miscellaneous.

 

21.1                        Governing Law.  Except to the extent expressly
provided herein or in connection with other matters of corporate governance and
authority (all of which shall be governed by the laws of the Company’s
jurisdiction of incorporation), the validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of Minnesota, notwithstanding the conflicts of laws
principles of any jurisdictions.

 

21.2                        Successors and Assigns.  The Plan will be binding
upon and inure to the benefit of the successors and permitted assigns of the
Company and the Participants.

 

21.3                        Forfeiture and Compensation Recovery.

 

(a)           The Committee may specify in an agreement evidencing an Incentive
Award that the Participant’s rights, payments, and benefits with respect to such
Award will be subject to reduction, cancellation, forfeiture or recovery by the
Company upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting or performance conditions of an Incentive Award. 
Such events may include termination of employment or other service for Cause;
violation of any material Company or Subsidiary policy; breach of
noncompetition, non-solicitation or confidentiality provisions that apply to the
Participant; a determination that the payment of the Incentive Award was based
on an incorrect determination that financial or other Performance Criteria were
met or other conduct by the Participant that is detrimental to the business or
reputation of the Company or its Subsidiaries.

 

(b)           Incentive Awards and any compensation associated therewith may be
made subject to forfeiture, recovery by the Company or other action pursuant to
any compensation recovery policy adopted by the Board or the Committee at any
time, including in response to the requirements of Section 10D of the Exchange
Act and any implementing rules and regulations thereunder, or as otherwise
required by law.  Any agreement evidencing an Incentive Award may be
unilaterally amended by the Committee to comply with any such compensation
recovery policy.

 

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