Exhibit 10.1
ROCHESTER MEDICAL CORPORATION
2010 STOCK INCENTIVE PLAN
Section 1. Purpose
     The purpose of the Plan is to promote the interests of the Company and its
shareholders by aiding the Company in attracting and retaining employees,
officers, consultants, independent contractors, advisors and non-employee
directors capable of assuring the future success of the Company, to offer such
persons incentives to put forth maximum efforts for the success of the Company’s
business and to compensate such persons through various stock-based arrangements
and provide them with opportunities for stock ownership in the Company, thereby
aligning the interests of such persons with the Company’s shareholders.
Section 2. Definitions
     As used in the Plan, the following terms shall have the meanings set forth
below:
     (a) “Affiliate” shall mean (i) any entity that, directly or indirectly
through one or more intermediaries, is controlled by the Company and (ii) any
entity in which the Company has a significant equity interest, in each case as
determined by the Committee.
     (b) “Award” shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, Stock
Award or Other Stock-Based Award granted under the Plan.
     (c) “Award Agreement” shall mean any written agreement, contract or other
instrument or document evidencing an Award granted under the Plan. An Award
Agreement may be in an electronic medium and need not be signed by a
representative of the Company or the Participant. Each Award Agreement shall be
subject to the applicable terms and conditions of the Plan and any other terms
and conditions (not inconsistent with the Plan) determined by the Committee.
     (d) “Board” shall mean the Board of Directors of the Company.
     (e) “Change in Control” shall have the meaning ascribed to such term in an
Award Agreement between the Participant and the Company.
     (f) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.
     (g) “Committee” shall mean the committee designated by the Board to
administer the Plan. The Committee shall be comprised of not less than such
number of Directors as shall be required to permit Awards granted under the Plan
to qualify under Rule 16b-3, and each member of the Committee shall be a
“non-employee director” within the meaning of Rule 16b-3 and an “outside
director” within the meaning of Section 162(m). The Company expects to have the
Plan administered in accordance with the requirements for the award of
“qualified performance-based compensation” within the meaning of Section 162(m).
     (h) “Company” shall mean Rochester Medical Corporation, a Minnesota
corporation, and any successor corporation.
     (i) “Director” shall mean a member of the Board.
     (j) “Dividend Equivalent” shall mean any right granted under Section 6(e)
of the Plan.

 

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     (k) “Eligible Person” shall mean any employee, officer, consultant,
independent contractor, advisor or non-employee director providing services to
the Company or any Affiliate whom the Committee determines to be an Eligible
Person. An Eligible Person must be a natural person.
     (l) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
     (m) “Fair Market Value” shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee. Notwithstanding the foregoing,
unless otherwise determined by the Committee, the Fair Market Value of Shares on
a given date for purposes of the Plan shall be the closing sale price of the
Shares on the NASDAQ Stock Market as reported on the consolidated transaction
reporting system on such date or, if such exchange is not open for trading on
such date, on the most recent preceding date that such exchange is open for
trading.
     (n) “Incentive Stock Option” shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision.
     (o) “Non-Qualified Stock Option” shall mean an option granted under Section
6(a) of the Plan that is not intended to be an Incentive Stock Option.
     (p) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock
Option to purchase shares of the Company.
     (q) “Other Stock-Based Award” shall mean any right granted under Section
6(g) of the Plan.
     (r) “Participant” shall mean an Eligible Person designated to be granted an
Award under the Plan.
     (s) “Performance Award” shall mean any right granted under Section 6(d) of
the Plan.
     (t) “Performance Goal” shall mean one or more of the following performance
goals, either individually, alternatively or in any combination, applied on a
corporate, subsidiary, division, business unit or line of business basis: sales,
revenue, costs, expenses, earnings (including one or more of net profit after
tax, gross profit, operating profit, earnings before interest and taxes,
earnings before interest, taxes, depreciation and amortization and net
earnings), earnings per share, earnings per share from continuing operations,
operating income, pre-tax income, operating income margin, net income, margins
(including one or more of gross, operating and net income margins), returns
(including one or more of return on actual or pro forma assets, net assets,
equity, investment, capital and net capital employed), shareholder return
(including total shareholder return relative to an index or peer group), stock
price, economic value added, cash generation, cash flow, unit volume, working
capital, market share, cost reductions, completion of key projects and strategic
plan development and implementation. Each such performance goal may be based
(i) solely by reference to absolute results of individual performance or
organizational performance at various levels (e.g., the Company’s performance or
the performance of a subsidiary, division, business segment or business unit of
the Company) or (ii) upon organizational performance relative to the comparable
performance of other companies selected by the Committee. To the extent
consistent with Section 162(m), the Committee may also exclude charges related
to an event or occurrence which the Committee determines should appropriately be
excluded, including (X) restructurings, discontinued operations, extraordinary
items, and other unusual or non-recurring charges, (Y) an event either not
directly related to the operations of the Company or not within the reasonable
control of the Company’s management, or (Z) the cumulative effects of tax or
accounting changes in accordance with U.S. generally accepted accounting
principles (or other accounting principles which may then be in effect).
     (u) “Person” shall mean any individual or entity, including a corporation,
partnership, limited liability company, association, joint venture or trust.
     (v) “Plan” shall mean the Rochester Medical Corporation 2010 Stock
Incentive Plan, as amended from time to time.

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     (w) “Restricted Stock” shall mean any Share granted under Section 6(c) of
the Plan.
     (x) “Restricted Stock Unit” shall mean any unit granted under Section 6(c)
of the Plan evidencing the right to receive a Share (or a cash payment equal to
the Fair Market Value of a Share) at some future date.
     (y) “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, or
any successor rule or regulation.
     (z) “Section 162(m)” shall mean Section 162(m) of the Code, or any
successor provision, and the applicable Treasury Regulations promulgated
thereunder.
     (aa) “Section 409A” shall mean Section 409A of the Code, or any successor
provision, and applicable Treasury Regulations and other applicable guidance
thereunder.
     (bb) “Securities Act” shall mean the Securities Act of 1933, as amended.
     (cc) “Shares” shall mean shares of Common Stock, without par value per
share, of the Company or such other securities or property as may become subject
to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
     (dd) “Specified Employee” shall mean a specified employee as defined in
Section 409A(a)(2)(B) of the Code or applicable proposed or final regulations
under Section 409A, determined in accordance with procedures established by the
Company and applied uniformly with respect to all plans maintained by the
Company that are subject to Section 409A.
     (ee) “Stock Appreciation Right” shall mean any right granted under Section
6(b) of the Plan.
     (ff) “Stock Award” shall mean any Share granted under Section 6(b) of the
Plan.
Section 3. Administration
     (a) Power and Authority of the Committee. The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan and to applicable
law, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to each
Participant under the Plan; (iii) determine the number of Shares to be covered
by (or the method by which payments or other rights are to be calculated in
connection with) each Award; (iv) determine the terms and conditions of any
Award or Award Agreement; (v) amend the terms and conditions of any Award or
Award Agreement, provided, however, that, except as otherwise permitted in
connection with an event as provided under Section 4(c) hereof, the Committee
shall not reprice, adjust or amend the exercise price of Options or the grant
price of Stock Appreciation Rights previously awarded to any Participant,
whether through amendment, cancellation and replacement grant, or any other
means; (vi) accelerate the exercisability of any Award or the lapse of any
restrictions relating to any Award, (vii) determine whether, to what extent and
under what circumstances Awards may be exercised in cash, Shares, promissory
notes (provided, however, that the acceptance of such promissory notes does not
conflict with Section 402 of the Sarbanes-Oxley Act of 2002), other securities,
other Awards or other property, or canceled, forfeited or suspended;
(viii) interpret and administer the Plan and any instrument or agreement,
including an Award Agreement, relating to the Plan; (ix) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; (x) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan; and (xi) adopt such modifications,
rules, procedures and subplans as may be necessary or desirable to comply with
provisions of the laws of non-U.S. jurisdictions in which the Company or an
Affiliate may operate, including, without limitation, establishing any special
rules for Affiliates, Eligible Persons or Participants located in any particular
country, in order to meet the objectives of the Plan and to ensure the viability
of the intended benefits of Awards granted to Participants located in such
non-United States jurisdictions. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and other decisions
under or with respect to the Plan or any Award or Award Agreement shall be
within the sole

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discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon any Participant, any holder or beneficiary of any
Award or Award Agreement, and any employee of the Company or any Affiliate.
     (b) Power and Authority of the Board. Notwithstanding anything to the
contrary contained herein, the Board may, at any time and from time to time,
without any further action of the Committee, exercise the powers and duties of
the Committee under the Plan, unless the exercise of such powers and duties by
the Board would cause the Plan not to comply with the requirements of Rule 16b-3
or Section 162(m).
Section 4. Shares Available for Awards
     (a) Shares Available. Subject to adjustment as provided in Section 4(c) of
the Plan, the aggregate number of Shares that may be issued under all Awards
under the Plan shall be 1,000,000. Notwithstanding the foregoing, (i) the number
of Shares available for granting Incentive Stock Options under the Plan shall
not exceed 1,000,000, subject to adjustment as provided in Section 4(c) of the
Plan and subject to the provisions of Section 422 or 424 of the Code or any
successor provision and (ii) the number of Shares available for granting
Restricted Stock and Restricted Stock Units shall not exceed 1,000,000, subject
to adjustment as provided in Section 4(c) of the Plan. If an Award terminates or
is forfeited or cancelled without the issuance of any Shares, or if any Shares
covered by an Award or to which an Award relates are not issued for any other
reason, then the number of Shares counted against the aggregate number of Shares
available under the Plan with respect to such Award, to the extent of any such
termination, forfeiture, cancellation or other event, shall again be available
for granting Awards under the Plan. If Shares of Restricted Stock are forfeited
or otherwise reacquired by the Company prior to vesting, whether or not
dividends have been paid on such Shares, then the number of Shares counted
against the aggregate number of Shares available under the Plan with respect to
such Award of Restricted Stock, to the extent of any such forfeiture or
reacquisition by the Company, shall again be available for granting Awards under
the Plan. Shares that are withheld in full or partial payment to the Company of
the purchase or exercise price relating to an Award or in connection with the
satisfaction of tax obligations relating to an Award shall not be available for
granting Awards under the Plan.
     (b) Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the number of Shares
covered by such Award or to which such Award relates shall be counted on the
date of grant of such Award against the aggregate number of Shares available for
granting Awards under the Plan. For Stock Appreciation Rights settled in Shares
upon exercise, the aggregate number of Shares with respect to which the Stock
Appreciation Right is exercised, rather than the number of Shares actually
issued upon exercise, shall be counted against the number of Shares available
for Awards under the Plan. Awards that do not entitle the holder thereof to
receive or purchase Shares and Awards that are settled in cash shall not be
counted against the aggregate number of Shares available for Awards under the
Plan.
     (c) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Shares
or other securities of the Company, issuance of warrants or other rights to
purchase Shares or other securities of the Company or other similar corporate
transaction or event affects the Shares such that an adjustment is necessary in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or other property) that thereafter may be made the
subject of Awards, (ii) the number and type of Shares (or other securities or
other property) subject to outstanding Awards, (iii) the purchase price or
exercise price with respect to any Award and (iv) the limitations contained in
Section 4(d) of the Plan; provided, however, that the number of Shares covered
by any Award or to which such Award relates shall always be a whole number. Such
adjustment shall be made by the Committee or the Board, whose determination in
that respect shall be final, binding and conclusive.
     Notwithstanding the foregoing in this Section 4(c), in the event (i) of any
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company or any other
similar corporate transaction or event involving the Company in which the
Company is not the continuing or surviving entity or in which the shareholders
of the Company prior to the corporate transaction or

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event do not continue to beneficially own at least 50% of the combined voting
power of the resulting entity, or (ii) the Company shall enter into a written
agreement to undergo such a transaction or event, the Committee or the Board
may, in its sole discretion, provide for any of the following:

  (i)   for either (A) termination of any such Award, whether or not vested, in
exchange for an amount of cash and/or other property, if any, equal to the
amount that would have been attained upon the exercise of such Award or
realization of the Participant’s rights (and, for the avoidance of doubt, if, as
of the date of the occurrence of the transaction or event described in this
Section 4(c), the Committee or the Board determines in good faith that no amount
would have been attained upon the exercise of such Award or realization of the
Participant’s rights, then such Award may be terminated by the Company without
payment) or (B) the replacement of such Award with other rights or property
selected by the Committee or the Board, in its sole discretion;     (ii)   that
such Award be assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor or survivor corporation, or a parent
or subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices;     (iii)   that such Award shall be exercisable or payable
or fully vested with respect to all Shares covered thereby at such date prior to
the effective date of such event as may be determined by the Committee or the
Board, notwithstanding anything to the contrary in the Plan or the applicable
Award Agreement; or     (iv)   that the Award cannot vest, be exercised or
become payable after a date certain in the future, which may be the effective
date of such event.

     In the event that the terms of any agreement between the Company or any
Affiliate and a Participant contains provisions that conflict with and are more
restrictive than the provisions of this Section 4(c), then this Section 4(c)
shall prevail and control and the more restrictive terms of such agreement (and
only such terms) shall be of no force or effect.
     (d) Award Limitations Under the Plan.

  (i)   Section 162(m) Limitation for Certain Types of Awards. No Eligible
Person may be granted Options, Stock Appreciation Rights or any other Award or
Awards under the Plan, the value of which Award or Awards is based solely on an
increase in the value of the Shares after the date of grant of such Award or
Awards, and which is intended to represent “qualified performance-based
compensation” with the meaning of Section 162(m), for more than 100,000 Shares
(subject to adjustment as provided for in Section 4(c) of the Plan), in the
aggregate in any taxable year.

  (ii)   Section 162(m) Limitation for Performance Awards Denominated in Shares.
No Eligible Person may be granted Performance Awards denominated in Shares
(including, without limitation, Restricted Stock and Restricted Stock Units),
and which are intended to represent “qualified performance-based compensation”
with the meaning of Section 162(m), for more than 100,000 Shares (subject to
adjustment as provided for in Section 4(c) of the Plan), in the aggregate in any
taxable year.

  (iii)   Section 162(m) Limitation for Performance Awards Denominated in Cash.
The maximum amount payable pursuant to all Performance Awards denominated in
cash to any Participant in the aggregate in any taxable year shall be $5,000,000
in value, whether payable in cash, Shares or other property. The limitation
contained in this Section 4(d)(iii) does not apply to any Award subject to the
limitation contained in Section 4(d)(i) or Section 4(d)(ii). The limitation
contained in this Section 4(d)(iii) shall apply only with

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      respect to Awards granted under this Plan, and limitations on awards
granted under any other shareholder approved executive incentive plan maintained
by the Company will be governed solely by the terms of such other plan.

Section 5. Eligibility
     Any Eligible Person shall be eligible to be designated a Participant. In
determining which Eligible Persons shall receive an Award and the terms of any
Award, the Committee may take into account the nature of the services rendered
by the respective Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the Committee, in its
discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive
Stock Option may only be granted to full-time or part-time employees (which term
as used herein includes, without limitation, officers and directors who are also
employees), and an Incentive Stock Option shall not be granted to an employee of
an Affiliate unless such Affiliate is also a “subsidiary corporation” of the
Company within the meaning of Section 424(f) of the Code or any successor
provision.
Section 6. Awards
     (a) Options. The Committee is hereby authorized to grant Options to
Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

  (i)   Exercise Price. The purchase price per Share purchasable under an Option
shall be determined by the Committee and shall not be less than 100% of the Fair
Market Value of a Share on the date of grant of such Option; provided, however,
that the Committee may designate a purchase price below Fair Market Value on the
date of grant (A) to the extent necessary or appropriate, as determined by the
Committee, to satisfy applicable legal or regulatory requirements of a foreign
jurisdiction or (B) if the Option is granted in substitution for a stock option
previously granted by an entity that is acquired by or merged with the Company
or an Affiliate.     (ii)   Option Term. The term of each Option shall be fixed
by the Committee at the time but shall not be longer than 10 years from the date
of grant.     (iii)   Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part and
the method or methods by which, and the form or forms (including, without
limitation, cash, Shares, promissory notes (provided, however, that the
acceptance of such promissory notes does not conflict with Section 402 of the
Sarbanes-Oxley Act of 2002), other securities, other Awards or other property,
or any combination thereof, having a Fair Market Value on the exercise date
equal to the applicable exercise price) in which, payment of the exercise price
with respect thereto may be made or deemed to have been made. Alternatively, the
Committee may, in its discretion, permit an Option to be exercised by delivering
to the Participant a number of Shares having an aggregate Fair Market Value
(determined as of the date of exercise) equal to the excess, if positive, of the
Fair Market Value of the Shares underlying the Option being exercised, on the
date of exercise, over the exercise price of the Option for such Shares.    
(iv)   Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, the following additional provisions shall apply to the grant of stock
options which are intended to qualify as Incentive Stock Options:

  (A)   The Committee will not grant Incentive Stock Options in which the
aggregate Fair Market Value (determined as of the time the Option is granted) of
the Shares with respect to which Incentive Stock Options are exercisable for the
first

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      time by any Participant during any calendar year (under this Plan and all
other plans of the Company and its Affiliates) shall exceed $100,000.     (B)  
All Incentive Stock Options must be granted within ten years from the earlier of
the date on which this Plan was adopted by the Board or the date this Plan was
approved by the shareholders of the Company.     (C)   Unless sooner exercised,
all Incentive Stock Options shall expire and no longer be exercisable no later
than 10 years after the date of grant; provided, however, that in the case of a
grant of an Incentive Stock Option to a Participant who, at the time such Option
is granted, owns (within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its Affiliate, such Incentive Stock Option shall
expire and no longer be exercisable no later than 5 years from the date of
grant.     (D)   The purchase price per Share for an Incentive Stock Option
shall be not less than 100% of the Fair Market Value of a Share on the date of
grant of the Incentive Stock Option; provided, however, that, in the case of the
grant of an Incentive Stock Option to a Participant who, at the time such Option
is granted, owns (within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its Affiliate, the purchase price per Share
purchasable under an Incentive Stock Option shall be not less than 110% of the
Fair Market Value of a Share on the date of grant of the Incentive Stock Option.
    (E)   Any Incentive Stock Option authorized under the Plan shall contain
such other provisions as the Committee shall deem advisable, but shall in all
events be consistent with and contain all provisions required in order to
qualify the Option as an Incentive Stock Option.

     (b) Stock Appreciation Rights. The Committee is hereby authorized to grant
Stock Appreciation Rights to Eligible Persons subject to the terms of the Plan
and any applicable Award Agreement. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive upon exercise thereof
the excess of (i) the Fair Market Value of one Share on the date of exercise
(or, if the Committee shall so determine, at any time during a specified period
before or after the date of exercise) over (ii) the grant price of the Stock
Appreciation Right as specified by the Committee, which price shall not be less
than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right; provided, however, that the Committee may designate a
grant price below Fair Market Value on the date of grant (A) to the extent
necessary or appropriate, as determined by the Committee, to satisfy applicable
legal or regulatory requirements of a foreign jurisdiction or (B) if the Stock
Appreciation Right is granted in substitution for a stock appreciation right
previously granted by an entity that is acquired by or merged with the Company
or an Affiliate. Subject to the terms of the Plan and any applicable Award
Agreement, the grant price, term, methods of exercise, dates of exercise,
methods of settlement and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.
     (c) Restricted Stock and Restricted Stock Units. The Committee is hereby
authorized to grant an Award of Restricted Stock and Restricted Stock Units to
Eligible Persons with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the Plan
as the Committee shall determine:

  (i)   Restrictions. Shares of Restricted Stock and Restricted Stock Units
shall be subject to such restrictions as the Committee may impose (including,
without limitation, any limitation on the right to vote a Share of Restricted
Stock or the right to receive any dividend or other right or property with
respect thereto), which restrictions may lapse

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      separately or in combination at such time or times, in such installments
or otherwise as the Committee may deem appropriate. Notwithstanding the
foregoing, the Committee may permit acceleration of vesting of such Awards in
the event of the Participant’s death, disability or retirement or a Change in
Control.     (ii)   Issuance and Delivery of Shares. Any Restricted Stock
granted under the Plan shall be issued at the time such Awards are granted and
may be evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of a stock certificate or certificates,
which certificate or certificates shall be held by the Company. Such certificate
or certificates shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the restrictions applicable to such
Restricted Stock. Shares representing Restricted Stock that are no longer
subject to restrictions shall be delivered to the Participant promptly after the
applicable restrictions lapse or are waived. In the case of Restricted Stock
Units, no Shares shall be issued at the time such Awards are granted. Upon the
lapse or waiver of restrictions and the restricted period relating to Restricted
Stock Units evidencing the right to receive Shares, such Shares shall be issued
and delivered to the holder of the Restricted Stock Units.     (iii)  
Forfeiture. Except as otherwise determined by the Committee, upon a
Participant’s termination of employment or resignation or removal as a director
(in either case, as determined under criteria established by the Committee)
during the applicable restriction period, all Shares of Restricted Stock and all
Restricted Stock Units held by the Participant at such time shall be forfeited
and reacquired by the Company; provided, however, that the Committee may, when
it finds that a waiver would be in the best interest of the Company, waive in
whole or in part any or all remaining restrictions with respect to Shares of
Restricted Stock or Restricted Stock Units, except as otherwise provided in the
Award Agreement.

     (d) Performance Awards. The Committee is hereby authorized to grant
Performance Awards to Eligible Persons subject to the terms of the Plan and any
applicable Award Agreement. A Performance Award granted under the Plan (i) may
be denominated or payable in cash, Shares (including, without limitation,
Restricted Stock and Restricted Stock Units), other securities, other Awards or
other property and (ii) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of one or more objective
Performance Goals during such performance periods as the Committee shall
establish. Subject to the terms of the Plan, the Performance Goals to be
achieved during any performance period, the length of any performance period,
the amount of any Performance Award granted, the amount of any payment or
transfer to be made pursuant to any Performance Award and any other terms and
conditions of any Performance Award shall be determined by the Committee.
Performance Awards that are granted to Eligible Persons who may be “covered
employees” under Section 162(m) and that are intended to be “qualified
performance-based compensation” within the meaning of Section 162(m), to the
extent required by Section 162(m), shall be conditioned solely on the
achievement of one or more objective Performance Goals established by the
Committee within the time prescribed by Section 162(m), and shall otherwise
comply with the requirements of Section 162(m), as described below.

  (i)   Timing of Designations; Duration of Performance Periods. For each Award
intended to be “qualified performance-based compensation”, the Committee shall,
not later than 90 days after the beginning of each performance period,
(i) designate all Participants for such performance period and (ii) establish
the objective performance factors for each Participant for that performance
period on the basis of one or more of Performance Goals; provided that, with
respect to such Performance Goals, the outcome is substantially uncertain at the
time the Committee actually establishes the Performance Goal. The Committee
shall have sole discretion to determine the applicable performance period,
provided that in the case of a performance period less than 12 months, in no
event shall a performance goal be considered to be pre-established if it is
established after 25 percent of the performance period (as scheduled in good
faith at the time the Performance Goal is established) has elapsed.

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  (ii)   Certification. Following the close of each performance period and prior
to payment of any amount to a Participant with respect to an Award intended to
be “qualified performance-based compensation,” the Committee shall certify in
writing as to the attainment of all factors (including the performance factors
for a Participant) upon which any payments to a Participant for that performance
period are to be based.     (iii)   Payment of Qualified Performance Awards.
Certified Awards shall be paid no later than two and one-half months following
the conclusion of the applicable performance period; provided, however, that the
Committee may establish procedures that allow for the payment of Awards on a
deferred basis subject to the requirements of Section 409A. The Committee may,
in its discretion, reduce the amount of a payout achieved and otherwise to be
paid in connection with an Award intended to be “qualified performance-based
compensation,” but may not exercise discretion to increase such amount.     (iv)
  Certain Events. If a Participant dies or becomes permanently and totally
disabled before the end of a performance period or after the performance period
and before an Award is paid, the Committee may, in its discretion, determine
that the Participant shall be paid a pro-rated portion of the Award that the
Participant would have received but for his or her death or disability.

     (e) Dividend Equivalents. The Committee is hereby authorized to grant
Dividend Equivalents to Eligible Persons under which the Participant shall be
entitled to receive payments (in cash, Shares, other securities, other Awards or
other property as determined in the discretion of the Committee) equivalent to
the amount of cash dividends paid by the Company to holders of Shares with
respect to a number of Shares determined by the Committee. Subject to the terms
of the Plan and any applicable Award Agreement, such Dividend Equivalents may
have such terms and conditions as the Committee shall determine.
     (f) Stock Awards. The Committee is hereby authorized to grant to Eligible
Persons Shares without restrictions thereon, as deemed by the Committee to be
consistent with the purpose of the Plan. Subject to the terms of the Plan and
any applicable Award Agreement, such Stock Awards may have such terms and
conditions as the Committee shall determine.
     (g) Other Stock-Based Awards. The Committee is hereby authorized to grant
to Eligible Persons such other Awards that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purpose of the Plan. The
Committee shall determine the terms and conditions of such Awards, subject to
the terms of the Plan and any applicable Award Agreement. Shares or other
securities delivered pursuant to a purchase right granted under this Section
6(g) shall be purchased for consideration having a value equal to at least 100%
of the Fair Market Value of such Shares, or other securities on the date the
purchase right is granted. The consideration paid by the Participant may be paid
by such method or methods and in such form or forms (including, without
limitation, cash, Shares, promissory notes (provided, however, that the
acceptance such promissory notes does not conflict with Section 402 of the
Sarbanes-Oxley Act of 2002), other securities, other Awards or other property or
any combination thereof), as the Committee shall determine.
     (h) General.

  (i)   Consideration for Awards. Awards may be granted for no cash
consideration or for any cash or other consideration as may be determined by the
Committee or required by applicable law.     (ii)   Awards May Be Granted
Separately or Together. Awards may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with or in substitution for
any other Award or any award granted under any other plan of the Company or any
Affiliate. Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under any other plan of the Company
or any Affiliate

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      may be granted either at the same time as or at a different time from the
grant of such other Awards or awards.     (iii)   Forms of Payment under Awards.
Subject to the terms of the Plan and of any applicable Award Agreement, payments
or transfers to be made by the Company or an Affiliate upon the grant, exercise
or payment of an Award may be made in such form or forms as the Committee shall
determine (including, without limitation, cash, Shares, promissory notes
(provided, however, that the acceptance of such promissory notes does not
conflict with Section 402 of the Sarbanes-Oxley Act of 2002), other securities,
other Awards or other property or any combination thereof), and may be made in a
single payment or transfer, in installments or on a deferred basis, in each case
in accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents with respect to installment or
deferred payments.     (iv)   Term of Awards. Subject to Section 6(a)(iv)(C),
the term of each Award shall be for a period not to exceed 10 years from the
date of grant.     (v)   Limits on Transfer of Awards. Except as otherwise
provided by the Committee or in this Section 6(h)(v), no Award (other than a
Stock Award) and no right under any such Award shall be transferable by a
Participant other than by will or by the laws of descent and distribution.
Notwithstanding the immediately preceding sentence, no Incentive Stock Option
shall be transferable by a Participant other than by will or by the laws of
descent and distribution. The Committee may establish procedures as it deems
appropriate for a Participant to designate a Person or Persons, as beneficiary
or beneficiaries, to exercise the rights of the Participant and receive any
property distributable with respect to any Award in the event of the
Participant’s death. The Committee, in its discretion and subject to such
additional terms and conditions as it determines, may permit a Participant to
transfer a Non-Qualified Stock Option to any “family member” (as defined in the
General Instructions to Form S-8 (or any successor to such Instructions or such
Form) under the Securities Act) at any time that such Participant holds such
Option, provided that such transfers may not be for value (as defined in the
General Instructions to Form S-8 (or any successor to such Instructions or such
Form) under the Securities Act) and the family member may not make any
subsequent transfers other than by will or by the laws of descent and
distribution. Each Award under the Plan or right under any such Award shall be
exercisable during the Participant’s lifetime only by the Participant (except as
provided herein or in an Award Agreement or amendment thereto relating to a
Non-Qualified Stock Option) or, if permissible under applicable law, by the
Participant’s guardian or legal representative. No Award (other than a Stock
Award) or right under any such Award may be pledged, alienated, attached or
otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate.     (vi)   Restrictions; Securities Exchange Listing. All Shares or
other securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such restrictions as the Committee may deem
advisable under the Plan, applicable federal or state securities laws and
regulatory requirements, and the Committee may cause appropriate entries to be
made with respect to, or legends to be placed on the certificates for, such
Shares or other securities to reflect such restrictions. The Company shall not
be required to deliver any Shares or other securities covered by an Award unless
and until the requirements of any federal or state securities or other laws,
rules or regulations (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.

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  (vii)   Section 409A Provisions. Notwithstanding anything in the Plan or any
Award Agreement to the contrary, to the extent that any amount or benefit that
constitutes “deferred compensation” to a Participant under Section 409A and
applicable guidance thereunder is otherwise payable or distributable to a
Participant under the Plan or any Award Agreement solely by reason of the
occurrence of a Change in Control or due to the Participant’s disability or
“separation from service” (as such term is defined under Section 409A), such
amount or benefit will not be payable or distributable to the Participant by
reason of such circumstance unless the Committee determines in good faith that
(i) the circumstances giving rise to such Change in Control, disability or
separation from service meet the definition of a change in ownership or control,
disability, or separation from service, as the case may be, in
Section 409A(a)(2)(A) of the Code and applicable proposed or final regulations,
or (ii) the payment or distribution of such amount or benefit would be exempt
from the application of Section 409A by reason of the short-term deferral
exemption or otherwise. Any payment or distribution that otherwise would be made
to a Participant who is a Specified Employee (as determined by the Committee in
good faith) on account of separation from service may not be made before the
date which is six months after the date of the Specified Employee’s separation
from service (or if earlier, upon the Specified Employee’s death) unless the
payment or distribution is exempt from the application of Section 409A by reason
of the short term deferral exemption or otherwise.

Section 7. Amendment and Termination; Corrections
     (a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan at any time; provided, however, that,
notwithstanding any other provision of the Plan or any Award Agreement, prior
approval of the shareholders of the Company shall be required for any amendment
to the Plan that:

  (i)   requires shareholder approval under the rules or regulations of the
Securities and Exchange Commission, the NASDAQ Stock Market or any other
securities exchange that are applicable to the Company;     (ii)   increases the
number of shares authorized under the Plan as specified in Section 4(a) of the
Plan;     (iii)   increases the number of shares subject to the limitation
contained in Section 4(d)(i) or Section 4(d)(ii) of the Plan or the dollar
amount subject to the limitation contained in Section 4(d)(iii) of the Plan;    
(iv)   permits the award of Options or Stock Appreciation Rights at a price less
than 100% of the Fair Market Value of a Share on the date of grant of such
Option or Stock Appreciation Right, contrary to the provisions of
Section 6(a)(i) and Section 6(b)(ii) of the Plan;     (v)   permits repricing of
Options or Stock Appreciation Rights which is prohibited by Section 3(a)(v) of
the Plan ; or     (vi)   would cause Section 162(m) to become unavailable with
respect to the Plan or permits.

     (b) Amendments to Awards. Subject to the provisions of the Plan, the
Committee may waive any conditions of or rights of the Company under any
outstanding Award, prospectively or retroactively. Except as otherwise provided
in the Plan, the Committee may amend, alter, suspend, discontinue or terminate
any outstanding Award, prospectively or retroactively, but no such action may
adversely affect the rights of the holder of such Award without the consent of
the Participant or holder or beneficiary thereof. Notwithstanding the foregoing,
the Committee shall not waive any conditions or rights of the Company, or
otherwise amend or alter any outstanding Award in such a manner as to cause such
Award not to constitute “qualified performance-based

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compensation” within the meaning of Section 162(m) of the Code. The Company
intends that Awards under the Plan shall satisfy the requirements of
Section 409A to avoid any adverse tax results thereunder, and the Committee
shall administer and interpret the Plan and all Award Agreements in a manner
consistent with that intent. If any provision of the Plan or an Award Agreement
would result in adverse tax consequences under Section 409A, the Committee may
amend that provision (or take any other action reasonably necessary) to avoid
any adverse tax results and no action taken to comply with Section 409A shall be
deemed to impair or otherwise adversely affect the rights of any holder of an
Award or beneficiary thereof.
     (c) Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award or Award Agreement in the manner and to the extent it shall
deem desirable to implement or maintain the effectiveness of the Plan.
Section 8. Income Tax Withholding
     In order to comply with all applicable federal, state, local or foreign
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state, local or foreign
payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all or a portion of the
applicable taxes to be withheld or collected upon exercise or receipt of (or the
lapse of restrictions relating to) an Award, the Committee, in its discretion
and subject to such additional terms and conditions as it may adopt, may permit
the Participant to satisfy such tax obligation by (a) electing to have the
Company withhold a portion of the Shares otherwise to be delivered upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes (but only to the extent of the
minimum amount required to be withheld under applicable laws or regulations) or
(b) delivering to the Company Shares other than Shares issuable upon exercise or
receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes. The election, if any, must be
made on or before the date that the amount of tax to be withheld is determined.
Section 9. General Provisions
     (a) No Rights to Awards. No Eligible Person, Participant or other Person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to any Participant or with respect to
different Participants.
     (b) Award Agreements. No Participant shall have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company and, if requested by the Company, signed
by the Participant, or until such Award Agreement is delivered and accepted
through an electronic medium in accordance with procedures established by the
Company.
     (c) Plan Provisions Control. In the event that any provision of an Award
Agreement conflicts with or is inconsistent in any respect with the terms of the
Plan as set forth herein or subsequently amended, the terms of the Plan shall
control.
     (d) No Rights of Shareholders. Except with respect to Restricted Stock and
Stock Awards, neither a Participant nor the Participant’s legal representative
shall be, or have any of the rights and privileges of, a shareholder of the
Company with respect to any Shares issuable upon the exercise or payment of any
Award, in whole or in part, unless and until such Shares have been issued.
     (e) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other or additional compensation plans or arrangements, and such plans or
arrangements may be either generally applicable or applicable only in specific
cases.

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     (f) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained as an employee of the Company or
any Affiliate, or the right to be retained as a director, nor will it affect in
any way the right of the Company or an Affiliate to terminate a Participant’s
employment at any time, with or without cause, or remove a director in
accordance with applicable law. In addition, the Company or an Affiliate may at
any time dismiss a Participant from employment, or remove a director who is a
Participant, free from any liability or any claim under the Plan or any Award,
unless otherwise expressly provided in the Plan or in any Award Agreement. By
participating in the Plan, each Participant shall be deemed to have accepted all
the conditions of the Plan and the terms and conditions of any rules and
regulations adopted by the Committee and shall be fully bound thereby.
     (g) Governing Law. The internal law, and not the law of conflicts, of the
State of Minnesota shall govern all questions concerning the validity,
construction and effect of the Plan or any Award, and any rules and regulations
relating to the Plan or any Award.
     (h) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended without, in
the determination of the Committee, materially altering the purpose or intent of
the Plan or the Award, such provision shall be stricken as to such jurisdiction
or Award, and the remainder of the Plan or any such Award shall remain in full
force and effect.
     (i) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Affiliate.
     (j) Other Benefits. No compensation or benefit awarded to or realized by
any Participant under the Plan shall be included for the purpose of computing
such Participant’s compensation or benefits under any pension, retirement,
savings, profit sharing, group insurance, disability, severance, termination
pay, welfare or other benefit plan of the Company, unless required by law or
otherwise provided by such other plan.
     (k) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash shall be paid in lieu of any fractional Share or whether such fractional
Share or any rights thereto shall be canceled, terminated or otherwise
eliminated.
     (l) Headings. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
     (m) Consultation With Professional Tax and Investment Advisors. The holder
of any Award granted hereunder acknowledges that the grant, exercise, vesting or
any payment with respect to such an Award, and the sale or other taxable
disposition of the Shares acquired pursuant to the Plan, may have tax
consequences pursuant to the Code or under local, state or international tax
laws. Such a holder further acknowledges that such holder is relying solely and
exclusively on the holder’s own professional tax and investment advisors with
respect to any and all such matters (and is not relying, in any manner, on the
Company or any of its employees or representatives). Finally, such a holder
understands and agrees that any and all tax consequences resulting from the
Award and its grant, exercise, vesting or any payment with respect thereto, and
the sale or other taxable disposition of the Shares acquired pursuant to the
Plan, is solely and exclusively the responsibility of such holder without any
expectation or understanding that the Company or any of its employees,
representatives or Affiliates will pay or reimburse such holder for such taxes
or other items.
     (n) Forfeiture. All Awards under this Plan shall be subject to forfeiture
and/or penalty conditions or provisions as determined by the Committee and set
forth in the applicable Award Agreement. Notwithstanding the foregoing
provisions, unless otherwise provided by the Committee in the applicable Award
Agreement, this Section 9(n) shall not be applicable to any Participant
following a Change in Control.

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     (o) Foreign Employees and Foreign Law Considerations. The Committee may
grant Awards to Eligible Persons who are foreign nationals, who are located
outside the United States, who are United States citizens or resident aliens on
global assignments in foreign nations, who are not compensated from a payroll
maintained in the United States, or who are otherwise subject to (or could cause
the Company to be subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the Committee, be
necessary or desirable to foster and promote achievement of the purposes of the
Plan, and, in furtherance of such purposes, the Committee may make such
modifications, amendments, procedures, or subplans as may be necessary or
advisable to comply with such legal or regulatory provisions.
     (p) Blackout Periods. Notwithstanding any other provision of this Plan or
any Award to the contrary, the Company shall have the authority to establish any
“blackout” period that the Company deems necessary or advisable with respect to
any or all Awards.
Section 10. Effective Date of the Plan
     The Plan shall be subject to approval by the shareholders of the Company at
the annual meeting of shareholders of the Company to be held on January 28,
2010, and the Plan shall be effective as of the date of such shareholder
approval.
Section 11. Term of the Plan
     No Award shall be granted under the Plan after ten years from the date of
shareholder approval or any earlier date of discontinuation or termination
established pursuant to Section 7(a) of the Plan; provided, however, that in the
case of a Performance Award intended to be “qualified performance-based
compensation,” no such Performance Award shall be granted under the Plan after
the fifth year following the year in which shareholders approved the Performance
Goals unless and until the Performance Goals are re-approved by the
shareholders. However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may extend beyond such
dates, and the authority of the Committee provided for hereunder with respect to
the Plan and any Awards, and the authority of the Board to amend the Plan, shall
extend beyond the termination of the Plan.

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